Archive | August, 2007

Surprised by Realism

31 Aug

Unlike Jamie Kirchick, I don’t think realists gaining influence within the Democratic policy establishment should be any cause for concern, even if you’re a hard-core liberal interventionist. The two Democratic frontrunners, Clinton and Obama, have advisors and support that either directly from the former internationalist Clinton administration, or are proponents of an active and potentially interventionist foreign policy (Samantha Power). But post-Iraq, we should expect some limitations on American power, considering the popular mood of the country and the resources we’ve already committed in Afghanistan and Iraq.

A realist camp withing the policy establishment is complimnetary, and quite predictable. Kirchick cites an Observer article detailing the rise of the realists:

The piece profiled former Clinton administration Defense official Michèle Flournoy, president of a new think tank called the Center for a New American Security, which hopes to staff the next Democratic presidential administration. According to the article, she and “her colleagues think the war in Iraq and the country’s plummeting reputation abroad changes the equation, and that the next president may have to reign in his or her ambitions when it comes to the projection of American power.”

Flournoy’s comment is a pretty sensible assessment of the foreign policy challenge a Democratic (or Republican, for that matter) president would face. Like balancing the budget during the Clinton administration, deficits run up during the Regan years restrained spending on social programs in order to maintain a strong economy. In a similar fashion, Clinton or Obama can’t simply run their ideal foreign policy, because they’ll have some cleaning up and restructuring to do after a failed Bush presidency. I know Kirchick wants to use this to suggest the Democrats are thinking of hiding out in the garage of the West Wing for the next several years, but the realists are just articulating the obvious.

Adventures in the Academy

30 Aug

Brad DeLong had an exciting first week class experience over at Berkeley:

“The 210a students are waiting for you.”

“What?”

“Economics 210a. The students. They are waiting for you. In Evans 608-7.”

“But 210a is in the spring!”

“There are seventeen 210a students waiting for you in Evans 608-7 right now.”

It turns out that when we in the Economics Department moved 210a from the fall to the spring semester, we never told the registrar. So students who relied on the schedule of classes rather than the Economics Department gossip vine thought 210a starts today.

And one of Prof. Delong’s reader’s shares this story:

In my youth, at a certain midwestern university . . .

The building maintenance people had, weirdly, put a number on every single door in the new physical science building, not merely the classrooms . . .

The registrar’s office didn’t quite grasp what building maintenance had done . . .

And that’s how my Calculus I class came to be scheduled to meet in the men’s bathroom . . .

(Insert scatological and mathematically themed quip here.)

 

What is the Optimal Rate of Liberalization?

30 Aug

Two articles in the latest issue of Foreign Policy–one by Robert Reich on capitalism and democracy (subscription only), and the other by Moisés Naím on the paradox of free-trade–got me thinking about what the optimal rate of liberalization might be and what sort of research had be done on the subject. As Reich points out:

But though free markets have brought unprecedented prosperity to many, they have been accompanied by widening inequalities of income and wealth, heightened job insecurity, and environmental hazards such as global warming.

This is one of the essential challenges of globalization: making sure that prosperity is broadly shared enough so that economic development isn’t derailed by the political process. If people start to get freaked out by the new private companies moving in down the street, or feel that their wages or security are threatened by a new trade deal, they’ll (rationally) seek redress through their political representatives. After that, it’s tariffs and protectionism, which might benefit some sectors of an economy but make the macroeconomy worse off. So how do you open markets without scaring the crap out of the electorate?

An admittedly limited search found only one article from 1997 that explicitly addressed the optimal rate of liberalization (in this case, trade liberalization) and it did so in the context of firm restructuring (PDF). It concludes that gradual liberalization may be better for a country with long-term development goals, while a faster, “big-bang” approach might be useful for short-term economic goals (because gradualism in an already competitive sector only encourages inefficient firms to hang around longer, reducing profits and souring people on the new reforms).

I’m sure that this sort of thing is hard to quantify or calculate; any optimal rate would depend upon factors like existing level of economic development, political openness, the sorts of political and civil institutions in country, and the available capital (natural and human). Those are a lot of factors to model. The answer might just be to liberalize as fast as the electorate can bear, with some of the “New Deal for Globalization” measures (from a July/August Foreign Affairs article) thrown in to alleviate anxieties and spread some of the costs around. These policy suggestions from Dan Drezner also seem like a way to avoid a mass of bandanna-clad protesters from marching on the capitol building and decrying the latest round of trade negotiations (and though the tear gas industry may be elated, it doesn’t do so much for the political process).

But this feels like policy afterthought rather than an actual plan for smoother liberalization. Suggestions?

Your (Weekly?) Poetry Fix

29 Aug

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Buy the latest issue of Denver Quarterly¹ and check out Danika Stegeman (and Tomaz Salamun, while you’re at it).

¹ Again, I’m recommending a poem in a small, university run literary journal, so you’ll have to check your local university library for copies. In fact, just take it–it’s not like anyone will notice.

The Turkey Question

28 Aug

Viewed through the lens of national self-interest, I’ve always thought of Turkey joining the EU as a general good, irrespective of what what it meant for Europeans. To some extent, I think fears about a changing European character or an immigration onslaught aren’t part of the US calculus for support, to say nothing of these fears being overblown. Having a moderate Muslim country as part of a Western transnational legal and trade framework is a boon to the world superpower. Of course, it’s the Europeans (or at least their elected representatives) and not the United States who will decide, so what’s best for America is somewhat besides the point.

With that in mind, I’m not sure how to think about a Turkey with a Muslim president (via Yellow is the Color). A president with strong religious credentials seems like a great partner for a Turkish EU induction. I often find European (and in this case, Turkish) secularization too aggressive, but much of that comes from living in a country where candidates openly profess their belief in God and no one tries to lead a coup. I accept that different concepts of secularization will be optimal for different countries.

Additionally, without narratives of long-term immigration and citizenship to fall back on, many Europeans are hostile to Muslim immigrants, and see their open displays of faith as an affront to European culture (witness France and their ban of the hijab). But Turkey bans the headscarf in government offices and schools too, and the Turkish military is hyper-vigilant on the secularization front.  A Muslim president might upset powerful secularists within Turkey, causing internal turmoil that impedes integration, or spark a backlash against the country from right-wingers in Europe, making an invitation to join the EU even less likely.  Turkey in the EU might be great for the US, but it seems increasingly harder to convince either Europeans or the Turkish that it’s also in their interests.

Nobody Likes the “R-Word”

28 Aug

Mark Thoma makes some sense:

We don’t need a recession. If the Fed determines an interest rate cut is needed to keep the economy moving toward full employment, then it shouldn’t hesitate to implement the policy because it believes it would send the wrong signal to financial market participants. I hope we don’t get so caught up in our zeal to make sure people learn the right lessons from all of this that we allow “bad investments in the past” to bring about “the unemployment of good workers in the present.”

I encourage you to read the whole thing.  There are two things to consider when arguing that the Fed can’t cut rates because of “moral hazard.” First, to what extent are market corrections (like the bubbles before them) driven by psychological cues? (i.e. Aren’t overly cautious investors likely to assume too much risk and over-correct on the way down as they did on the way up?). And second, haven’t the worst of the lenders been driven out of the financial market already?  (Larry Summers made this last point on This Week while cautioning that the crisis isn’t over yet).

The Perfect Car, Made in America

28 Aug

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I know that by “perfect American car,” Garance Franke-Ruta meant one that was designed and manufactured by GM, Ford, or Chrysler, but really, how can you beat being one of Car and Driver‘s 10 Best for more than a decade? Not only is the Honda Accord really made in America, but with 244 horsepower and i-VTEC (and some of the best handling in the industry) you can hose kids in the standard Mustang while toting a gaggle of toddlers in the back seat. It’s not all about burning people off the line; anyone can be a hero in the straightaway. I love globalization.