Monday, December 29, 2008

the aggressor in the Kulturkampf

Mostly because of my interest in economic policy, and the fact law makers actually spend very little of their time developing legislation that deals with social issues like abortion, I consider myself a economic or business conservative, which overlaps, or ought to, with libertarianism.

But libertarianism is broader. While libertarians are economic conservatives (supporting, for example, free markets), they are social liberals. As my previous post may illustrate, I am frequently frustrated by the anti-intellectual demogoguery emanating from self-styled so-cons, to the point whereby I am often tempted to just state clearly that I, likely my former high school friend Colby Cosh, am a libertarian, full stop.

But while I would then have less of a need to elaborate on why I support a scientific, evidence-based, "intellectual" approach to resolving policy issues in general, fact is I am postmodern enough to NOT see Reason as the final touchstone in all realms. I see a need to circumscribe it to the instrumental realm, a project that's been described in more detail by German philosopher Jürgen Habermas.

It's the fact that in practice we could use more reason, not less, in our public debates that tempts me to endorse full-on libertarianism without qualification. But philosophically sophisticated arguments for social conservatism such as those described by Daniel Bell are compelling, or at least deserving of more attention.

Norms have value. People who believe some emancipatory effect will follow from the elimination of sexual norms are putting too much stock into theory (Reason, if you will) and not enough into the reality of human nature. The idea that youth, for example, will be more self-determined if traditional influences are removed is largely a fiction. What would replace it are other cultural influences. Undermine the norms generally endorsed by parents, for example, and you'll empower unreflective peer pressure, not individuals in idealized, abstracted isolation, and that peer pressure would generally serve the baser elements of social darwinism. What people are being emancipated to, in other words, is the prehistoric savannah where the contributions of potential Newtons, Einsteins, Vivaldis etc were undeveloped and unsupported. The point here can, and is, frequently taken too far. But there is a point, just as Nietzsche makes something of a counterpoint. What's missing is an intellectual curiousity about why norms like not running around in the nude arose in the first place.

The content of the norms is generally not so important as the fact they simply exist, in my view. Is one superior by virtue of being, say, white, male, and Protestant? No. But is it reasonable to consider that important? Yes. Whether it should be important may be debated, but where the social left goes most awry is on the issue of whether it is important. A religious revival might well do more to solve otherwise intractable social problems and improve human satisifcation than a new bureaucratic government spending program.

Which brings me to the uproar over Obama's invitation to Rick Warren. Rich Lowry identifies the "cultural left" as the "aggressor" in this latest flare-up in the culture war. I agree, and am futhermore reminded of why I'm not a libertarian. A libertarian might well be compelled to agree that Warren should be disinvited, which would be an extremely dogmatic stance that furthered a distorted view of the particular facts. Pastor Rick is not a hatemonger, and the efforts to paint him as such strike me as less loving, more "hateful" if you will, than what Rick Warren has been preaching and writing about his whole career. The activists here are looking to provoke a political showdown that Warren is not looking for.

I've argued elsewhere that gay marriage is not a libertarian issue anyway. I won't repeat the reasons here in detail, other than to say that the issue is unlike the decriminalization of homosexuality by going to positive "rights", namely the right to compel government action, as opposed to negative rights. Gay marriage is about normalizing deviancy, not about the right to deviate. Some readers may jump at my use of the word deviant here, saying its highly pejorative, but for what it's worth I am using the term as an entirely descriptive, sociological term.

UPDATE:
This San Francisco pundit supported same sex marriage in the past but has since turned cold on the idea because of the intolerance exhibited... by SSM supporters.

UPDATE 2:
Continuing with this theme, what I think bothers a lot of moderates is the, shall we say, lack of magnanimity shown by the left:
The Left has won the culture war, and, at least in the near-term, its victory is irreversible. In social relations, the right to choose trumps all other considerations: to fornicate, marry, breed, abort, divorce, and abandon. That a single mother with six kids should opt for another eight because she feels like it captures the distilled essence of the cultural moment that we have entered. 

meanwhile, in Alberta

According to the Canadian Press, British Columbia is "seen to have a more attractive fiscal regime than Alberta" and notes that energy execs "have said they're spending more in B.C. and less in Alberta on account of the latter's "punitive" royalty regime. Other names like EnCana, Talisman, Petro-Canada, Nexen and Imperial have also been grabbing land in Northeast B.C."

A securities analyst observed that "As much of Alberta likes to think we're the king of the hill as far as resources go, we're losing ground to Saskatchewan as well."

According to the executive director of the Small Explorers and Producers Association of Canada, the Stelmach government showed an extreme over-confidence when it opted for the royalty hike saying, "It's not just enough to say 'well, where else would they go? Surely Alberta's the place to be. It's not."

"We've done a lot of things as a province in the last year or two to chase away investment," Mazar added.

On the one hand, these reports from my home province reduce my incentive to return. I plan on starting a business and want to do that in a business friendly environment. But on the other hand perhaps Alberta politics will change if these reports continue. If energy prices remain where they are, spending-spree Stelmach may be in deficit in 2009, and voters may not be forgiving.

Obama impressive so far

I'd be remiss if I didn't applaud Barack Obama's appointments to date. According to PBS Newshour, 'Scientists and scientific organizations hailed the president-elect's choice of top science advisers as a "dream team.'" I just take this an example. More important is Obama's economic team, and on that count most people should be equally impressed, given Obama's leftish background.

There were, or course, many signs before the election that Obama would govern from the centre, but distinguishing between what was campaigning and what was the real Obama was not easy. One key bit of evidence that the real Obama would be a President whom conservative intellectuals could potentially live with was an anecdote in PBS FRONTLINE's "The Choice", which aired in October. It described how the small minority of "right wing" students in Harvard Law grudgingly supported Obama for President of the Law Review and were subsequently satisfied with his performance in that role. Obama was more concerned with producing a top quality product than with serving up red meat for his liberal base, to the point where most of the frustration with Obama ending up coming from campus radicals who thought Obama wasn't delivering on their agenda.

This was almost enough to move me to endorse Obama over McCain. In the end I could not, because although Obama is impressively cerebral and deliberate in his apparent decision making style, the FRONTLINE anecdote was just that, an anecdote, and Obama's official positions on issues like trade and US agricultural subsidies were indisputably inferior to McCain's.

In Canada, we supposedly have our own intellectual politician, one Michael Ignatieff. If the grandstanding populist antics of the nominally "Conservative" Danny Williams in Newfoundland (e.g. expropriating the property of a private firm by simply passing a new bill instead of going before a court to obtain a government-favourable result under pre-existing contracts and legislation) are compared to the corporate-tax-cutting/staunch-refusal-to-expropriate policies of the nominally "Liberal" Shawn Graham in New Brunswick, I dare say that libertarians, and people who are unimpressed with thorough-going populism of other "Canadian Conservatives" like Alberta premier Stelmach or, for that matter, Prime Minister Harper, can quite defensibly find more of a home for themselves in the Liberal party than a Conservative one.

Such is the magnitude of Obama's popularity with educated Americans that Krugman may will be right: Republicans are in danger of becoming the "party of stupid". And I'll be frank, Sarah Palin would do nothing to arrest such a slide. Canada's Tories may be headed in the same direction, not just because of their own tendency to play to the rabble, but because the nomination of Ignatieff and the pursuit of policies like the Green Shift (which didn't quite put them into the "Pigou club" beloved of economists like Greg Mankiw but was definitely in a step in that direction) have raised the policy respectibility of the Liberal brand (a respectibility that was nonetheless greatly eroded by the announced "coalition" with the economically dangerous NDP and Bloc).

Friday, December 19, 2008

"I just hope they know what they're doing."

It's just a gigantic scale.... It's the entire economic consensus in this country, including the academic economists, the Treasury people.... We're just taking such big moves. As I say, I just hope they know what they're doing.
- David Brooks, The Newshour with Jim Lehrer, November 28

I also hope they know what they're doing.

And I have major doubts that they do.

Let's start with the contradictions. "The entire economic consensus" used to be that cutting consumption taxes, like Canada's GST, which was just cut another 1% earlier this year, was the worst possible tax cut. Yet Britain cuts its VAT 2.5% and "Jonathan Loynes, chief UK economist at Capital Economics, said: 'This would be a bold, high-impact way of putting money straight into consumers’ pockets.'" Another source says that "[Britain's] economists seem united by a single opinion over the Government's immediate move to slash VAT from 17.5% to 15%. ... The move was, broadly, welcomed, and [even] criticised as not on its own being enough..."

So what was formerly out of fashion, to put it charitably, is now "bold" and "high impact"?

Auto sector bailout? Joseph Stiglitz is opposed, which wouldn't be especially surprising were it not for the fact that Stiglitz has been the most prominent economist to repeatedly jab an accusing finger at the Washington Consensus and free markets generally. Apparently Stiglitz doesn't think the decisions of private finance re the allocation of capital should be second-guessed... except when they should.

The incongruities increase: Germany's Social Democratic finance minister, Peer Steinbrück, said:
All this will do is raise Britain's debt to a level that will take a whole generation to work off. The same people who would never touch deficit spending are now tossing around billions. The switch from decades of supply-side politics all the way to a crass Keynesianism is breathtaking. When I ask about the origins of the crisis, economists I respect tell me it is the credit-financed growth of recent years and decades. Isn’t this the same mistake everyone is suddenly making again, under all the public pressure?

A supposedly left wing politician, and a Continental one at that, is the voice speaking out against a deficit-financed government spending spree? I'm reminded of when the NDP criticized Alberta's "Conservative" government for its spending. Considering the source, perhaps they have a point?

It is true that there are economists like Greg Mankiw who consider themselves stimulus skeptics, but Mankiw is (1) apparently very much in the minority ("Only one outside economist contacted by Obama aides, Harvard's Greg Mankiw, voiced skepticism") and (2) Mankiw is careful to call himself a skeptic and not an opposer.

There was a time when I put a lot of stock in what academics hold as true with respect to finance and economics. But my experience of the real world of finance disabused me of notions that are still considered gospel for professors, like market efficiency. Markets are not efficient with respect to pricing; they are inevitably subject to manias, panics, and crashes (unless (and even then this is just a theoretical unless) there is total transparency and simplicity with respect to how to determine fundamental values). Indeed, this is at the very core of what got us into this mess: the idea that market-determined prices reflect economic fundamentals. Financial engineers were given free reign to innovate ever more exotic financial products that worked AGAINST efficiency instead of for it by reducing transparency and simplicity. You didn't get better capital pricing with more financial market development, you got worse. Things got further and further away from fundamentals because the trial of bread crumbs became so long and convoluted nobody could understand it.

Now, as an aside, when I speak of market development I speak of the number and complexity of financial instruments (in particular second and third order instruments, aka derivatives) as opposed to liquidity. If I were pointing the finger at liquidity or trading levels, I'd be pointing the finger at capitalism itself.

These academics, in conjunction with the Wall Street veterans who have a conflict of interest with respect to bringing the sort of transparency to capital pricing that would allow non-Ivy League MBAs to figure out what was going on, are supposed to be now be deferred to with respect to a gi-normous dump of future generation financed government spending?

Germany's social democrats are questioning the wisdom of a massive expansion of government, while the Anglo-Saxon world is gung-ho. May you live in interesting times.

Wednesday, December 3, 2008

Dion tape proves necessity for public subsidies

The production quality of (soon to be Prime Minister) Dion's televised speech last night has removed the few remaining objections I had to a minimal level of public support for political parties.

If Canadians stand for anything, it's a fair fight, and the federal Liberals are clearly desperately short of resources!
The NDP said Wednesday's fiasco undermined the credibility of the coalition.... (Bloc Quebecois Leader) Gilles Duceppe ran into Mr. Dion in the elevator and asked 'What the hell happened?'
- Robert Fife, CTV

Former GG says too much?

In her memoirs, former governor general Adrienne Clarkson said ... she would only have allowed a [Former Prime Minister Paul] Martin request for dissolution if he had been in office six months. "To put the Canadian people through an election before six months would have been irresponsible," she wrote.
- CBC

The problem with this statement is that it essentially says if opposition forces engineer a confidence vote that brings down the government within six months of an election, there will be no electoral accountability. The statement itself is not problematic so much as what it omits. What it omits is a qualifying clause to the effect that any new government created in the absence of an election should go to the polls for its own mandate within a certain period.

Canadians are currently facing the prospect of two consecutive Prime Ministers, Dion and Ignatieff (or, less likely, Bob Rae), each with a mere quarter of Commons seats held by their party, serving for up to 5 years between the two of them, should NDP and Bloc MPs decline to vote against them during that time period. By convention, that shouldn't happen. But in a constitutional democracy, one would think there should be a constitutional limit to how long a Prime Minister Ignatieff could govern without facing the polls, a limit less than 5 years. The only one who could really impose such a limit on the Prime Minister is the monarch (the GG), and the time do it would be when denying the request of the previous Prime Minister (the one being ousted) for a vote on the newly configured government.

This change of government would likely be easier to swallow for a lot of Canadians if Harper had lost the confidence of federalists in the House. But the fact is that his party's seats outnumber the seats of the Liberals and NDP by a couple dozen. As such, he's the federalist choice for Prime Minister, love it or hate it, and could not be forced out of office but for separatists.

stimulus? - the facts


  • The IMF currently projects a contraction of output in all G7 economies EXCEPT CANADA in 2009.

  • According to StatsCan and surveys of private forecastors, final domestic demand in Canada continues to grow, "supported by the solid financial positions of both households and businesses"

  • According to the Department of Finance, "the decline in consumer confidence in Canada has been much less pronounced than in the U.S"
  • and "private sector forecasters have not significantly altered their medium-term economic outlook since Budget 2008"
  • Again according to Finance Canada, "housing activity has been solid, with housing starts so far in 2008 well above the average over the previous 30 years" and "none of the conditions that led to the U.S. housing and financial market collapse are present in Canada."
Consider this from the supposedly offending Update:




Yes, it is a Department of Finance graphic. But, no, I do not believe it should be dismissed as somehow partisan and unreliable. I worked at Finance and we did not just make things up.

See also this:



Apparently, somewhere in the above chart is massive unemployment, such that an massive change in government is needed to bring about a massive increase in government spending.

I don't see it. What we have here is a true opportunity to contain the growth of the size of government. And it follows from the fact Canadians don't like deficit spending. Irrational? Perhaps. But as someone who has run for office in Alberta, I can assure you that if you are a fiscal conservative, there is no political market for restrained spending when the government is flush with cash. Alberta is supposedly one of the most conservative jurisdictions in North America, yet it has increased per capita spending the most in recent years. That's because the public sees "fiscal conservatism" as being all about deficits.

Britain cuts VAT by 2.5%

Effective December 1.

When you consider that Canada's last GST cut just took effect this year, and that we now know that the US recession officially began in December 2007, where, again, are all those economists who panned the wisdom of the GST cut? No change of opinion?

Tuesday, December 2, 2008

Simpson mistaken re economist consensus

In a G&M option piece Jeffrey Simpson suggests that economists are unwilling to acknowledge that the Canadian government spending and tax cuts of the last 3 years did anything to reduce the need for a stimulus now. I don't believe that's the case. If he read his own newspaper he would have noted the headline that Jack Mintz "defends Harper's approach" to a stimulus.

Many if not most economists believe it takes several months if not years for fiscal measures to work their way through the economy. If Simpson could produce economists who say IN HINDSIGHT (i.e., now) that the GST cuts were a mistake, he might have a point. But I'm one economist who believes that subsequent developments on the ground have gone to some length to suggest the GST cuts constituted timely demand management, insofar as it is possible to really manage demand at all, whatever the textbook failings of the move.

The enthusiasm amongst economists for the Canadian stimulus being discussed is also less than overwhelming. There are serious concerns about creating a structural deficit; that is, a deficit that will be difficult to reverse in the future. Again, what the Keynesian textbook says and what political reality says are two different things. How is a massive deficit supposed to be reversed in the future? Which benefiting constituency will agree to see its increases cut in the future?

This isn't to say I disagree with need for fiscal stimuli elsewhere in the world. But the situation in Canada is not nearly so dire. Monetary policy is far more effective and appropriate, and should be largely sufficient in Canada. There's a reason why monetary policy is independent of political game playing, and the same reason would apply to fiscal policy to a large extent.

From the IMF:

In practice, discretionary fiscal measures are typically slower to arrive than monetary policy responses... Moreover, fiscal measures often become permanent, implying that public debt creeps upward.
... there have been calls in many countries for governments to actively use fiscal policy to stimulate the economy. Indeed, the United States has already responded.... But there are many commentators and economists who argue that these sorts of actions stand to do more harm than good.

Great Firewall of China a strange beast

Unfortunately, various Canadian pundits are censored here. I can't get anything from Macleans.ca. Andrew Coyne, Paul Wells, and Warren Kinsella are blocked as well. Everything on the Globe and Mail IS available, though, as is CalgaryGrit and Stephen Taylor. The National Post is also available. I can't really see a pattern here...

I understand I can get around the Firewall using Tor, but that isn't helpful advice when the Tor project homepage is itself censored as well as lists of proxy servers that I've looked for...

Monday, December 1, 2008

Dion about to be come PM of Canada

I believe it is entirely democratic for Stephane Dion to become Prime Minister. If more Parliamentarians support him than Stephen Harper, then c'est la vie. There should be a substantive and irreconcible economic policy difference if there is to be a change of government, however. That condition for a democratic, orderly change of government seems to be satisfied, in that there's apparently a fundamental disagreement over the amount of money the government should be spending in 2009.

However, one has to ask whether there is really a mandate for the spending spree (aka "stimulus") that the Liberal-NDP coalition is clearly about to embark on. Fact is, blue or business-friendly, fiscally conservative Liberal supporters together with Tory supporters form a majority in Canada. Were the Canadian government of the last three years a hard right government, it would be one thing, but the reality is that federal spending increased substantially during this period... certainly the budgets have not been remarkably "un-Canadian" in any way. But the next Liberal-NDP budget might well be "un-Canadian" in the extent to which it diverges from Canadian budgets since 1984. Keep in mind that it was a Liberal government that balanced the budget in the 90s and moved forward on a corporate tax cut agenda. That had the support of the majority of Canadians. It is far from clear that Canadians support deficit spending, and an auto and forestry industry bail-out in particular.

According to the coalition's announced policy framework, there will be
- Support for culture, including the cancellation of budget cuts announced by the Conservative government.
- Support for Canadian Wheat Board and Supply Management
- Immigration Reform
- Reinstate regional development agency funding...

The first is ultimately a relatively minor matter budget-wise, or at least the extent to which Canadians seem to vote on it is out of proportion to its impact on the budget. The second, support for supply management, is anti-free trade and accordingly unsupported by most economists. I don't know what John Manley's role is supposed to be when there is explicit support for policies like this. Keep in mind that the Tories weren't exactly aggressively dismantling supply management in the first place. "Immigration Reform" in the context of what the political debates have been means a dialing down of efforts to prioritize skilled worker immigration over family immigration; social policy pursued at the expense of economic policy, in other words. The last point refers to the boondoggle of regional subsidies, again something the Conservative government has pedaled softly on, such that one can only imagine a significant ramping up of the dubious practice under a new Liberal-NDP coalition.


UPDATE:

A lot of people will focus on the reference to "Canadians and Quebecers" in the preamble. As far as I'm concerned, this is largely optics. If it makes Quebecers (isn't it Quebeckers?) happy, I tend to be libertarian about such things. I'm more concerned that the focus on "supply management" and "regional development" means national economic policies that harm the country, with particular harm to Alberta and west.

Sunday, November 30, 2008

drama in Ottawa

I might well have voted Liberal in the federal election last month had I been in Canada. I like Dion's corporate tax proposals and his remarks about opposing the NDP on this count. I like Dion's willingness to present policy initiatives like the "Green Shift" even if it had problems; at least it's a step better than the cynical populism of the Tories. I also like Iggy's background (it's not a liability to be educated, despite what Sarah Palin supporters might think) and even some of Bob Rae's remarks, like what Bob said about Georgia vs Russia. Of course, there's a lot I don't like about the Liberals, like their immigration policy, but in a number of respect the Liberals seemed the party of ideas in contrast to the party of the angry and pugnacious.

But I can't help but notice the Globe and Mail announcement that "Jack Mintz defends the Harper approach" [to stimulus]. I've referred to Mintz before; - I consider him Canada's top fiscal policy expert. If the opposition takes down the government on this issue (the public financing of political parties issue having been taken off the table), I will be off the fence in terms of Liberal vs Conservative. It would be a huge mistake for the Liberals to get on the wrong side of sound policy, and that's where you are if you are on the wrong side of Jack Mintz.

I don't entirely agree with Mintz re public financing of political parties, but on that count it is not really much of an economic issue. I see little fundamental difference beeen tax privileging political donations and outright subsidies, either way you are steering economic resources towards political parties. Does anyone think cutting tax credits for political donations would be a good idea? I see a vibrant marketplace of ideas as something of a positive externality. That said, the sums do matter. $30 million is a mere drop in bucket budget wise but $300 million is questionable. $30 million would help get messages out, whereas $300 million would get them out and market them in a big way, which shouldn't be necessary since the punditocracy will "market" the messages if they have merit. They just need enough help to get on the radar screen, in my view (of course, in Alberta it works the opposite: the bigger the party, the bigger the taxpayer support).

Saturday, November 29, 2008

Financial Crisis '08: attack of the parasites

How did this happen?

In a nutshell, consumption, especially in the US, of housing was at an unsustainable level, driven as it was by mispriced credit (too cheap). Government policies such as the deductiblity of interest on money borrowed to purchase a home aggravated the mispricing.

In general you support laissez faire policy on the grounds that government interventions, however well intentioned, typically create mispricings that undermine their objectives. But when you suggest here that government policy "aggravated" the mispricing, are you suggesting that the free market mispriced?

Yes. To begin with, free markets are subject to panics, manias, and bubbles, and these are mispricings. The "bubble" in US mortgage lending has been followed by a global credit panic.

It is important to understand here that panics and bubbles are symptoms of a problem, however, as opposed to the problem themselves. The problem is a lack of transparency. If it is clear to everyone what the "true" price should be, prices wouldn't soar far beyond that or crash far below.

Financial intermediation is critical to economic development. It puts people with ideas about how to produce more for less together with people with the capital to enable that idea. Unfortunately for capital suppliers, they have less information about the value of potential investment opportunities than the capital seeking entrepreneurs. Economists call this "information asymmetry", a concept at the core of financial market theory.

There are various things governments and regulators can do to try to address this problem, such as mandating disclosure and prohibiting trading on non-public information (lest the pool of willing capital suppliers shrink to insiders). Especially important is creating an investor friendly tax and legal system in the background. One of the lessons of this crisis, however, is that there was, in the end, still a significant shortage of information, or, more precisely a shortage of meaningful information in a sea of complex data.

So price discovery cannot be left to the private sector?

The wrong lesson from this crisis is that government should discover prices (i.e. determine how much of any given good or service should be produced). The right lesson is that private actors discover prices best and what happened is that these actors were overwhelmed by other private actors who obscured prices.

Who obscured prices here?

The guilty parties are legion, ranging from mortgage applicants who misrepresented their incomes to uninformed retail traders who exacerbated any mania or panic, but the prime culprits here are investment bankers. Investment bankers are financial innovators. And for a long time this financial innovation was economically useful. For example, whoever invented the common share made a very useful contribution by creating a product that represents a residual claim on a firm's assets instead of a fixed claim (like a bond or a bank loan). But with the explosion of progressively more complex derivatives, the generally useful process of spreading risk by slicing and splicing various payoffs and exposures became dominated by the harmful process of of obscuring just what the risks were.

Is there an example of when spreading risk is not useful?

Yes. Consider a bank originating a mortgage. It knows the borrower if it has a first hand relationship and has every incentive to monitor that borrower. If the default risk is spread, the bank will lend more and monitor less. Indeed, this financial crisis brings us back to the typically ignored policy fact which is that overinvestment is as much a problem as underinvestment per se, overinvestment in a particular sector implying mispriced investment (which in turn implies underinvestment in some other area). When investment bankers step in to slice and dice the risk across a chain of parties, they create another chain of information asymmetries and the duty to monitor suffers from a "tragedy of the commons".

How does it serve these investment bankers to obscure?

The more complex the valuation process is, the more these people leverage their comparative advantage. Markets move money from the uninformed to the informed. To a large extent, this is what policy makers want, because it is central to the idea of efficient price discovery. But in this case, "informed" people were making money who were not, in fact, more informed about the fundamental economic (as opposed to financial) values, they were rather more informed about the operations of things like derivatives, which do not further price discovery.

Why do you call derivatives parasites?

Because the value of a derivative is entirely derived from the value of the underlying. Resources diverted to pricing derivatives are resources diverted away from price discovery of the underlying.

Had the investment bankers really understood the nature of the beast they created, they would have kept the host alive. But in the end the beast was so big it completely obscured any view of the host.

GST cut clever and timely after all?

When the federal Tories cut the GST, it was widely panned by academic economists since it encourages consumption instead of investment.

Yet today the consensus seems close to universal that governments worldwide need to stimulate consumption by running deficits or otherwise pursuing policies that stimulate spending as opposed to saving. Never mind that borrowing to consume is what got the developed world into its present crisis...!

EXAMPLE:

"[The favorite go-to economist for the Canadian media, Don Drummond, said] "the government should consider cutting taxes on lower income Canadians [who are] more likely to spend the money than those more affluent who might be tempted to bank it."

This is EXACTLY what was trotted as the reason why NOT to cut the GST (the tax savings would get spent instead of "banked").

Tuesday, November 25, 2008

comments on financial crisis in development
















Kunming, the capital of Yunnan province and the only city with international flights to northern Burma, is forecast to be cold, relative to Dali, so I expect to be here in Dali until Sunday. I'll thus head to the Burmese consulate first thing next Monday morning with the idea of flying to Mandalay as soon as possible next week. Hot and humind southern Myanmar (Burma), including the capital Yangon (Rangoon), has little appeal to me, so unless I want to book an extra flight from Yangon north, the time to go is when I'll be in Kunming anyway. There is also a Burmese consulate in Kunming, so if I were to go to Burma later, I'd have to route through a city that has one, which might be out of my way.

I was thinking of getting to northern Thailand via Laos, but entering Thailand from Burma would be rather more unique, and I may go through Laos anyway to return to Kunming next month. There is apparently a two week wait to get a Burmese permit to exit overland, but applying and waiting in Burma where I'd probably be for 2 weeks anyway is reportedly easier than trying to enter Burma and go far into the country from Thailand.

All this to say that I've got some time on my hands this week and I've started putting together some thoughts about the financial crisis and its policy implications.

Monday, November 24, 2008

in China














I ended up rather busy while in Hong Kong, but now have some time in Old Dali, a city in China's southwestern Yunnan province.

My #1 pet peeve about China is the spitting. Closely followed by the smoking. Every station in an internet cafe will have an ashtray. On the plus side are the prices, which are typically listed, and when they aren't the locals will invariably give you change back just as if you were a local.

Tuesday, November 4, 2008

Dems lose white vote... again

The Democrat candidate for the White House hasn't won a majority of the white vote since 1964, and Barack Obama hasn't won it either, according to exit polls. In fact, he didn't even win a majority of white women.

For all the optimism about what this election represents, I think it should be tempered with some sober reflection on just how limited the extent was to which Obama "won the argument". Winning an election based on demographic changes alone is not "winning the argument". This isn't to deny that Obama did not win some thoughtful people over as opposed to just winning because of identity politics. But regress the wins in Virginia (and possibly NC) to the demographic changes there and then consider Ronald Reagan's 1984 landsilde. The number of people who changed their minds in how they voted betweeen 2000, 2004, and 2008 is dwarfed by, say, the people who changed their minds between 1976, 1980, and 1984.

Lest anyone think I'm simply being ungracious, keep in mind that my overriding interest is simply seeing more policy debates, more sophisticated policy debates, introduced into the campaign process. When people are celebrating the victory of "one of their own", it suggests that that the policy debate fell out as irrelevant; all those voters needed to know was which candidate looked more like them. I'm not at all sure how it illustrates the triumph of what's great about democracy if the most sober lessson is that the best way to get yourself elected is to find a constituency where you match up best demographically.

On another note, the election of Obama has evidently done nothing to improve Moscow's opinion of America.

UPDATE:

Gay marriage ban defeated in California if only whites had voted... "What carried it over the top was enormous support from black voters, with about 70 percent of them backing it."

Monday, November 3, 2008

President Obama...

In the recent Canadian election, had I been in the country to vote it wouldn't have been an easy decision for me. As a youth I was down-the-line "conservative", but as I approach middle age I've become increasingly frustrated with the anti-intellectual strain that runs through cultural conservatism. What one person sees as an appeal to the values of the patriotic and hardworking man in the street is another person's rabble-rousing populism, retarding rather than advancing informed policy discussion. And the federal Canadian Tories have become master populists. A productivity agenda? If there was one, I'd suspect it was coming from the civil servants in Ottawa, not the Conservative Party. Perhaps if they had a coherent climate change strategy, or, in the alternative, the courage to simply deny the need for any government role in mitigating climate change, I could see them as the party of superior policy. But of course the Tories have been purely reactive on that file and my time on the inside of Flaherty's Finance Department occasionally made me nostaligic for John Manley, someone who, by the way, has been fighting the good fight for North American economic integration instead of just picking fights with other politicians....

The US election, however, is clearer. Make no mistake: I would vote Obama Prom King any day of the week. I like his cerebral style, his graciousness, the inspiration he provides to people of colour. But when it comes to policy, there is limited evidence for the thesis that Obama takes growth friendly policies as his starting point. It seems that he takes a conception of social and/or economic "justice" as his starting point, and then mitigates any damage to economic growth as a second step. This is a recipe for poor policy, in my view. Yes, growth only policy needs adjustment; - gross inquality can result and this can and should be mitigated. But McCain seems more likely to have the steps in the policy process in the right order. Yes, McCain doesn't know much about economics (as Joe Klein of TIME insists on pointing out), but McCain seems more inclined to defer free market economists than Obama. Obama respects expertise, of course, but explain to me how that respect actually means something in the end if, for example, he votes for rent controls as he did while a state senator?

Obama is a genuine expert in constitutional law. I'll grant that. But as someone with a degree in both law and business, I believe that business expertise and/or experience is far more valuable in a politician than legal expertise. Suppose that foreign policy is a more pressing issue than the economy. On that count we've already seen McCain exhibit better judgment on issues ranging from the surge to Georgia. Yes, Obama was right on Iraq, however one has to ask whether Obama's decision wasn't based on his sense of justice as opposed to a prescient appreciation of the subsequent practical problems; i.e. an ideological approach that happened to be proved right as opposed to a savvy pragmatic approach. The man TIME magazine called Obama's top foreign policy advisor, Tony Lake, has claimed that the guilt of Alger Hiss is not settled. Yet John Ehrman notes that "The basic question — whether Alger Hiss was a spy for the Soviet Union during the 1930s and 1940s — was finally settled during the 1990s". The bipartisan Moynihan Commission concluded that "The complicity of Alger Hiss of the State Department seems settled" and Moynihan (D-NY) himself said there is "conclusive evidence of his guilt". Stanley Kutler has observed that "In the end, the publication of the Venona intercepts of wartime Soviet espionage referring to "Ales" settled the matter". Scholar David Oshinsky says that the "vast majority of historians” accept Whittaker Chambers' overall version of events and "[t]o accept the guilt of Alger Hiss is to admit the bitter truth about a small but sinister part of America's "progressive" past". Intelligence expert Thomas Powers notes that "...much additional evidence about Hiss's involvement with the Soviets has turned up since the voluminous and explicit claims by Whittaker Chambers and Elizabeth Bentley in the 1940s, claims which no serious scholar of the subject any longer dismisses". See also Robert Beisner, Mark Kramer, David Greenberg, Allen Weinstein, John Earl Haynes, Harvey Klehr ("Outside the ranks of Nation readers and a dwindling coterie of academic leftists, there are few people still willing to claim that Alger Hiss and Harry Dexter White were not Soviet agents"), Vasili Mitrokhin, Ronald Radosh ("Except for a dwindling group — mostly Nation magazine readers and editors ... the consensus has solidified: Hiss was undoubtedly a Soviet spy"), Sam Tanenhaus, G. Edward White etc. etc. Leftist academic Ellen Schrecker concedes that "There is now too much evidence from too many different sources for anyone but the most die-hard loyalists to argue convincingly for the innocence of Hiss" as does Maurice Isserman ("Let's face it, the debate just ended" (in Isserman's review of Weinstein's Haunted Wood)). Even at the self-described "flagship of the left", Nation contributor Athan Theoharis grants that the "conventional assessment" is that Hiss was "an unreconstructed Soviet spy" and editor Victor Navasky himself allows that he's not with the "consensus historians". If that isn't enough, one could cite the New York Times, the Washington Post, TIME, PBS NOVA ("Venona also helps to settle the case of Alger Hiss") etc. And this is Obama's top foreign policy advisor?

When did the media call attention to the fact this Obama advisor is offside all but the most dogmatically leftist of experts on at least this one issue? In the mean time, you've got the running media narrative that questioning Obama's assocations amounts to dirty campaigning.

A review of this substantive editorial in the Times of India indicates the international enthusiasm for Obama is less than universal. The Wall Street Journal has distinguished itself in its coverage of this election (unlike the vast majority of the media), and one asks oneself why other papers aren't carrying the observations of, to take one example, Nobel Prize winning economist Vernon Smith, who writes, "it is entirely likely that Mr. Obama will succeed in going for higher business, capital gains and income taxes, but it is an economic illusion to think for a minute that this will benefit the poor." Then there's others, like the (incidentally black) economist Thomas Sowell, who suggests that tomorrow's election will provide "all the ingredients for a historic meltdown".

Obama's support for the Farm Bill, and McCain's opposition to that egregious legislation, is probably my single biggest problem with Obama, closely followed by Obama's ties to anti-trade interest groups like unions "("...I owe those unions" - "Audacity of Hope", paperback, p. 142). McCain's is far more emotional than Obama, and that goes to judgement, but that detractor for McCain is somewhat tempered by the fact I see that as a greater inclination to have greater affection for and sympathy for his enemies. Obama's post-partisanship might well be entirely rhetorical.

If the generally accepted narrative about Obama was skeptical, I'd be more comfortable with the idea of President Obama. But it isn't, and I'm not.

Wednesday, October 29, 2008

in Hong Kong

I'll be in Hong Kong for at least the next couple weeks, and will probably travel for a week or two in southwest China second half of November. I'm thinking of heading to Perth, Australia for the first week of December, and then spending the middle of December in Thailand or possibly returning to Vietnam, where I spent about 10 days last December. I may spend Christmas and New Year's in Singapore, travelling to India for a bit in late January. I might swing by the Phillippines in February, or maybe head to South America for a final couple months before "settling down". There's also some chance I might remain in Asia until to becomes warm enough to reasonably make a spring trip across Russia from the Pacific to the Atlantic.

That's all tentative, though. There are two elements to expanding one's consciousness, increasing the amount and variety of raw stimuli, and increasing the intensity and scope of one's deliberations upon that stimuli. The former is concrete and requires moving oneself to whatever the particularized experience is available. The latter is abstract and although theoretically doable anywhere, generally access to abstracted communication is necessary. That's a complicated way of saying there is a limit to how much I can learn and how educated I can be apart from access to the internet, western media, books, etc. Human knowledge and understanding is an extremely collaborative exercise; while some truths can and have been discovered quite independently, that rarely happens in the 21st century.

All this to say that while I feel my time travelling increases my awareness of the world, there are limits to that effect. As TS Eliot observed, "Shakespeare acquired more essential history from Plutarch than most men could from the whole British Museum." The point being that I could potentially be a more developed person by staying home with a quality book than by heading to, say, London, even with all that it offers culturally.

On that note, I may have a blog post or two over the next couple weeks while I'm here in Hong Kong and have internet access.

The real activity of life is the great activity of the developing consciousness, physical, mental, intuitional, religious — all-round consciousness. This is the real business of life, and is the great game of grown men. All that other affair, of work and money, should be settled and subordinated to this, the great game of real living, of developing ourselves physically, in subtlety of movement, and grace and beauty of bodily awareness, and of deepening and widening our whole consciousness, so that we really become men, instead of remaining the poor, cramped, limited slaves we are.

- DH Lawrence, Letter to Charles Wilson, 28 Dec 1928

Wednesday, October 8, 2008

in Africa

Apologies to all for no notice of the fact I have been travelling in southern Africa.

It has been a very concrete, physical experience: Kalahari sands too cold to walk 10 steps on at 3 AM, too hot to walk 5 steps on at 3 PM; spectacular sunrises and sunsets, moonrises as well; getting into sync with the cycles of the sun and the moon; enduring a series of days where it was 42 degrees in the shade, fresh water snorkeling in Lake Malawi, dealing with breakdowns, fascinating fellow travellers, etc.

I arrived in Mauritius on August 27 and Jo'burg on September 4. I'm currently in Malawi. Next up: Zambia, although that may be the end, with me flying back to Jo'burg from Lusaka on or about Oct 21. We'll see!

Sunday, August 24, 2008

the necessary enigma of Pat Buchanan

In a world where the cachet of "alternative" is largely reserved for the left, Pat Buchanan's boat rocking dissents are a welcome challenge to conventional wisdom from the right.

I'll confess that I haven't read Churchill, Hitler, and "The Unnecessary War": How Britain Lost Its Empire and the West Lost the World. However, the appearance of this book should not be the least bit surprising to followers of Buchanan's thinking in recent years and his description of the world wars as a "Civil War of the West". Paleo-conservatism is not politically viable today next to the alternatives of left-liberalism and neo-conservatism and that is largely because elements of paleo-conservatism reject the universalization of identity in favour of a particularistic "blood and the soil" narrative and that sort of thinking is seen in many corners as the intellectual root to the horrific excesses of Nazism. Buchanan's anxiety over immigration was the accepted wisdom prior to World War II, yet after it became a political third rail. It's only natural that Buchanan is going to lament the event that empowered cultural relativism and pushed his identity politics to the fringe.

Christopher Hitchens' critique of the book, and his conclusion that it not only "stinks" but has "sinister" elements, is likely to be one of the most popular critiques. Whether it is truly a book review is an open question. Hitchens doesn't seem to object to the Buchanan's scholarship so much as to Buchanan's weltanschauung: e.g. "[a]s the book develops, Buchanan begins to unmask his true colors more and more." In many respects, this proves the point about paleo-conservatism's marginalization: one doesn't argue with it, it's assumptions are rather self-evidently evil such that one need only expose it.

Hitchens takes strong exception to Buchanan's contention that, as Hitchens puts it, "the Nazi decision to embark on a Holocaust of European Jewry was 'not a cause of the war but an awful consequence of the war.'" According to Hitchens, "This absolutely will not do." On this point, Hitchens' absolutism is quite out of place. Why? Because the greatest evil of war is the breakdown in the norms of human behaviour that come with it. The Anglo-French guarantee of the Polish corridor transformed a tragedy for Poland into a tragedy for all of Europe. Now, perhaps it was a necessary tragedy. But that's an intricate hypothetical involving an enormous amount of abstraction about the "greater good" when the practical consequence of western efforts to weaken Hitler's hand would merely be to strengthen Stalin's unless the west could project its own power into the area (eastern Europe) in such a way as to keep Stalin from filling the vacuum (as an aside, this is why I am more dubious about military intervention in Iraq or Afghanistan than in Georgia or North Korea: in the former cases you have Iran or some unsavoury local warlord ready to fill the power vacuum, in the latter you've got the relatively respectable governments in Tbilisi and Seoul). Indeed, Buchanan's central contribution here is his review of the particular facts that illustrate how the non-self-interested "what brings a greater good for eastern Europeans" argument was not only dubious but was not even a significant consideration at the time. The historical evidence indicates that Hitler was interested in a war with the East, not the West. Atrocities are committed during times of war that are not committed to anything approaching the same extent when the legitimacy or reach of state authority is not under such direct and significant challenge. The scale of the crimes of peacetime Nazi Germany and wartime Nazi Germany are not comparable. Hitchens contends that it is "fatuous" to suppose that, without the "occasion" of the Second World War, "the Nazis would not have found another" occasion for "the organized deportation and slaughter of the Jews."

It is, in fact, quite the opposite of "fatuous". It is a question at the heart of a humanitarian, as opposed to ideological and impractical, anti-war policy. If one were to say, "it is outrageous to suggest that Germany's claim to the Polish corridor was so strong that Germany was justified starting World War II", one would be missing the point entirely. The point is that it is less than absolutely obvious that Germany's claim was so weak that expanding a German-Polish war into a war with the west would ultimately generate fewer horrors on net when a hulking Soviet Russia was right in the thick of it as well. Keep in mind here that eastern Europe was largely liberated from Moscow's communist authoritarianism in 1989 without the west firing a shot. The extent to which emancipatory effects actually follow from escalations of violence as opposed to heightened horrors is thus not a "fatuous" question.

Central to Hitchens thesis is the unelaborated assumption that the west was not facing a highly contentious "lesser of two evils" scenario with respect to Hitler vs Stalin. As a former Trotskyite, it is not surprising where Hitchens' sympathies lie. According to Hitchens, in the wake of 1945, "all the way from Portugal to the Urals, the principle of human rights" are the norm. "Human rights" were the "norm" "all the way ... to the Urals" in 1950? Hitchens doesn't say 1950, of course, he says, "today", but that makes the enormous assumption that whereas Soviet authoritarianism eroded over time, Nazi authoritarianism would not have. Look at the mentality of Germans today, and it is clear that the Germans are no more inherently racist, warmongering, authoritarian, or brutal than the Russians. The looting and expulsions that went on behind Russian lines in Georgia in 2008 have enough parallels to 1945 that it is, in fact, plausible to argue that the Russian mentality is more consistently resistent to western values than the German.

Unfortunately for my view of Buchanan, he undermines much of his own argument about how Churchill unwisely fueled the spiral of violence when Buchanan says, in reference to the contemporary conflict in Georgia, that "Georgia started this fight – Russia finished it. People who start wars don't get to decide how and when they end." Even if it is true that Georgia "started this fight", one could turn that around to say that since Germany started the fight in September 1939, any and all horrors subsequent, such as the Red Army's raping of literally millions of German women in 1945, should somehow be excused.

If humanity is going to step out of the shadow of hatred, we have to stop tying one instance of injustice to another and instead stand up and put a stop to the spiral. That doesn't mean arbitrarily choosing a point and saying, "no more from here", since that might just enshrine the outcome of the latest injustice. It means actually weighing the proportionality of each response and considering the particular messy details of the conflict.

Buchanan's column on Georgia isn't paleo-conservative, in my view, since it is chock full of the same supposed equivalencies trotted out by the left: Israel, Kosovo, etc etc. Paleo-conservatism, at its core, is particularistic, by which I mean it rejects the applicability of generalized abstractions, in particular the universal brotherhood of man. The fact I'm a male of northern European heritage, for example, says a great deal about me, and it isn't a moral statement but rather an insight. It's an explanation for why I think what I think and do what I do, not a justification. Buchanan gets away from this thesis when he assumes the relevance of a string of conflicts involving different cultures and conditions instead of considering what is unique to each particular case.

Saturday, August 23, 2008

Joe Biden

Joe Biden has said a lot of intelligent things when it comes to foreign policy and he would have been my top recommendation to Obama if Wes Clark was not going to be considered.

That said, Biden is not a centrist. Like Obama, he voted against John Roberts' Supreme Court nomination, despite the fact that if he had voted in favour, he would have been voting with the majority of Senate Democrats.

There's also the various problems chronicled in this New York Times article from twenty years ago.

In any case, it is the top of the ticket that matters far more, and on that count, if you've been following Greg Mankiw's blog, there is mounting concern over Obama-nomics.

Russian media at work

Check out Google's cache of an Interfax wire dated August 5. Then click on what it is a cache of. Gone! Evidently, news of militants entering what Russia officially considers Georgian territory on August 5 (traveling from North Ossetia to South Ossetia) needed to be scrubbed, perhaps because it didn't fit well with the narrative that the Georgians "started" the war on August 7.

See also this New York Times story on how the Russian media presented the FOX News clip.

"On [Russian] TV there is hardly any free reporting -- instead you see a lot of very aggressive propaganda." So says Lev Gudkov, director of the Levada Center. Der Spiegel adds that Gudkov believes it is "reminiscent of the worst of times in the Soviet era."

On an unrelated note, the cultural differences between Georgia and Iraq are telling. Tbilisi's authority in Poti (a port I spent a few days in last October) is surely negligible when the city is under Russian control and road and rail links to the Georgian capital have been severed. But instead of reports of Georgians looting each other, we get reports of demonstrations against Russia.

Friday, August 22, 2008

Georgia's economy

Last year, the World Bank called Georgia the world's "top economic reformer".

Foreign Direct Investment was 19.8% of Georgian GDP in 2007 (the highest rate in the world according to Richard Holbrooke) compared with 13.9% in 2006. In terms of raw amounts, FDI doubled every year.

In just three years, Georgia rose from 122nd to 18th — ahead of Germany — in the World Bank's "Doing Business" survey.

GDP grew an astounding 12.4% in 2007, one of the fastest rates in the world.

Just last month, Roy Southworth, World Bank country director for Georgia, praised Saakashvili's government for promoting growth, reducing poverty and fighting corruption.

Sunday, August 17, 2008

BBC bias part III

In another Reynolds piece,

... the West needs to acknowledge that the Russians did have a case. It needs to explain why it helped Kosovo but questioned Russia's right to help South Ossetia

It has been explained! See Deutsche Welle's interview with legal experts and note the "Not Another Kosovo" section. See also the New York Times on the question of "Is This Different Than Kosovo?" and this Slate piece: South Ossetia Isn't Kosovo. Reynolds' journalism is misleading because it implies that material like this does not exist. Responsible journalism would acknowledge the offered explanations and then bat them down in a piece that is clearly labeled opinion or editorial. Bonus question for Reynolds: when Russia "helped" South Ossetia did it help the more than 15 thousand Georgians living in South Ossetia who were robbed and expelled as a consequence of the Russian "help" or do they not count?

Since I've titled this "BBC bias" instead of "Paul Reynolds bias", let's consider a BBC piece without an author byline. The "timeline" pulls a Georgian action on August 7 out of the sequence of events to mark its beginning, the day "Georgian forces launch a surprise attack".

"Surprise"! From out of the clear blue sky of peace and harmony "perfidious" Georgian aggression bursts forth! Yet Russia's Interfax news agency reported that on August 5 "Volunteers are arriving in South Ossetia to offer help in the event of Georgian aggression". You've got forces moving across the internationally recognized Russia/Georgia border and that's just ignored?

According to the UK Times,

[t]he US State Department’s internal timeline of the crisis pinpoints the explosion on August 1 of two roadside bombs, believed to have been planted by South Ossetian separatists sympathetic to Russia, as a decisive moment. Five Georgian policemen were injured, one severely. ... It now appears that August 1 was a well-prepared “provocation”...

And according to the New York Times,

Pentagon and military officials say Russia held a major ground exercise in July just north of Georgia’s border, called Caucasus 2008, that played out a chain of events like the one carried out over recent days.
'This exercise was exactly what they executed in Georgia just a few weeks later,' said Dale Herspring, an expert on Russian military affairs at Kansas State University. 'This exercise was a complete dress rehearsal.'

Perhaps someone will write "surprise" on a piece of paper and pin it next to Reynold's "evidence" on a bulletin board in the BBC editorial room under the title of "We Called It!".

Meanwhile, the UK Times reports what went on behind Russian lines, as does the Guardian.

















UPDATE (August 24): A BBC Editor has apologized... for a "slip" whereby a "Russian invasion" was mentioned. There was no invasion. So very sorry. The Russian army ended up in Poti on the BBC's magic carpet ride, also known as a "humanitarian intervention". The there was no US-led "humanitarian intervention" in Iraq, however, the BBC can call an "invasion" when it sees one!

BBC bias part II

The examples of BBC partiality don't end there, although the further examples are not nearly as egregious as what I noted yesterday; that is, Reynold's description of Ossetian allegations as "evidence" (South Ossetia also claims that "Georgian fascists' atrocities ... outshone those of World War II Nazis"; - is that "evidence" as well, Mr Reynolds, that doesn't need a "difficult to verify" tag like Georgian claims?) and his painting of Moscow as the victim in "propaganda war" and/or "mud" slinging "media game" that Reynolds furthermore suggests is masterminded by "[t]he Bush administration". As Human Rights Watch noted, this was no "game" for victims here.

To consider another, less outrageous, example, then, take this Reynold's article:
It was not hard for Russia to justify its intervention. It simply stated that its citizens were not only at risk but under attack.

By that logic it would "not be hard for Russia to justify" an invasion of any and all of the Baltic States and Ukraine!

Justify to whom? To us? To the BBC? Titling the section "Do not allow a cuckoo to police the nest" is not a substitute for "justify TO ITSELF" if that's all Reynolds means to say. Failing to add "to itself" is the sort of editorial lapse I'm talking about here; minor, but real enough to take issue with - I'm not saying the BBC is no better than Russia Today.

More importantly, is there any "argument" "against that"? Is there an acknowledgment of the remarks of the current Chair of the Committee of Ministers of the Council of Europe, Sweden's Carl Bildt:
We did not accept military intervention by Milosevic's Serbia in other former Yugoslav states on the grounds of protecting Serbian passport holders. And we have reason to remember how Hitler used this very doctrine little more than half a century ago to undermine and attack substantial parts of central Europe

No. Instead, in the same piece, Reynolds writes of
the neo-conservatives ... who see Georgia (and Ukraine) as flag bearers for freedom which must be supported... Against that is the argument...
Reynolds doesn't miss the chance to inform readers of a counter-argument to "neo-con" appeals to "freedom" but treats Russia's self-interested casus belli uncritically. That isn't bias?

Saturday, August 16, 2008

BBC bias on display: unverified vs "evidence"

While the BBC qualifies the claims of Georgian refugees as unverified ("but..."), the claims of Ossetian refugees are "evidence"! BBC correspondent Paul Reynolds also takes a select quote from Human Rights Watch to argue, in a non sequitur stretching from Tskhinvali to the White House, that "[t]he Bush administration appears to be ... playing down the Georgian attack [into the parts of its breakaway enclave that it does not already control] on 7 August". Never mind that Tom Parfitt of the Guardian quotes Human Rights Watch's Anna Neistat as saying

"The torching of houses in these [Georgian] villages is in some ways a result of the massive Russian propaganda machine which constantly repeats claims of genocide and exaggerates the casualties. That is then used to justify retribution."

The "machine" even managed to get "2000 dead" out on FOX, practically the citadel of conservative American mass media, from where it's gone viral on youtube and is raging through the blogosphere like Ossetians through Georgian villages. Yet Reynolds reports the "news" that Russia "los[t] the propaganda war"!

I suppose BBC's abandonment of its MSM gatekeeper role concerning the Ossetian/Russian allegations is a fitting parallel to the role the west has played concerning the gates to Georgia.

While Reynolds takes Georgia's relatively fledgling communications to task for daring to draw analogies with Prague in 1968 or Budapest in 1956 ("The comparisons did not fit the facts"), the International Herald Tribune ("the global edition of the New York Times") says that today "Russian armor ... travel[ed] nearly to the edge of the Georgian capital", a move that "opened a new security vacuum between Gori and [Igoeti], creating fresh targets" for "looters and armed gangs in uniform - many of them apparently Ossetians, Chechens and Cossacks - [who] have operated behind the army's path, ransacking villages..." and in another article titled "Georgians doing forced labor in South Ossetia" the paper quotes "a Russian officer" as believing that "Labor even turns monkeys into humans."

Reynolds also wags the finger at the "Western media" and unspecified nefarious forces for throwing "mud" at Moscow, and the BBC does not identify this piece as opinion or editorial?

I've e-mailed Mr Reynolds to ask him to comment on the rather different perspective of the editors at the Washington Post.

After reading this gripping overview in the Guardian, "A dirty little war", I don't think it is too much to say, shame on you, BBC, not just for being biased (to the anti-American left), but for abandoning the humanitarianism of left-leaning journalism like that of the Guardian. Guardian op-eds and editorials have "Comment" above their titles. This one has "News". The paper is accordingly puting the full weight of its credibility behind the claims of the fact this piece, claims of fact Reynolds should be challenging if he is not going to be writing a retraction.

Friday, August 15, 2008

FOX misidentifies Ossetian irregulars as "Georgian forces"

According to FOX reporters, they were fired on by "undisciplined" "Georgian forces" at a Russian-manned Gori checkpoint on the highway from Tbilisi.

Let's review what's remarkable about this:

1) British, Czech, Norwegian, Turkish, Canadian, Danish, and even Russian journalists have all been either killed, shot at, carjacked, or robbed by Ossetian "irregulars". FOX has the unique status of being the only news organization to report a hostile encounter with Georgians.

2) The reporters' description of events, "one minute, you're sitting down with Russian forces, the next minute, carloads of Georgian forces drive up" and start firing, bears an uncanny resemblance to this Associated Press description of events at Gori from the day before:
Near a gasoline station up the road, Georgian officers with binoculars watched as dozens of journalists gathered near the Russians tanks, taping and photographing them up close and attempting to talk to the soldiers. ...
But the situation turned ugly. South Ossetian militiamen, who are allied with the more disciplined Russian troops, appeared and began shouting at people to leave the area. They were highly aggressive, pointing weapons and shoving civilians. One older fighter with a beard fired a pistol in the air.

Note the matching narrative, right down to the "pistol".

3) The AP story also discusses what happened earlier:
In the morning, columns of Georgian police and military vehicles prepared to reoccupy the strategic town of Gori after the expected departure of Russian forces. ...
Reports of a collapse in negotiations on a handover of the town triggered a confrontation between Georgian and Russian troops at a checkpoint on the main road, a little over a mile from the center of Gori. No shots were fired, but Russian tanks quickly roared up in a display of might that forced the Georgians to pull back.
The story also refers to when "panicked Georgian troops fled for safety in pickup trucks". Apparently, FOX would have us believe that Georgian troops not only overcame any panic they might have had, but showed up at the checkpoint to start firing at journos talking with Russian soldiers? When there is a ceasefire in place? In the only report of any Georgian firing that day? A "large contingent of the world's media" is there and only FOX reports on this remarkable development?

4) Our intrepid FOX reporter states multiple times that these "Georgian forces" were "irregular". This is the first reported sighting of a "Georgian irregular" in the 21st century!

some disturbing videos

Turkish journalists under fire. See here for the rest of the story.

This FOX clip appears to be going viral. Watch it and draw your own conclusions about whether anyone is being censored.

Notice that the FOX host started stuttering a bit after the "2000 were killed" claim. No doubt it created a real dilemma for FOX given the following:

The torching of houses in these villages is in some ways a result of the massive Russia propaganda machine which constantly repeats claims of genocide and exaggerates the casualties. That is then used to justify retribution.
- Anna Neistat of Human Rights Watch

See also this Wall Street Journal article, "Evidence in Georgia Belies Russia's Claims of 'Genocide'"

Excellent op-eds here and here.

Wednesday, August 13, 2008

"an orgy of looting, burning, murdering and rape"

See this story and this one. Those familiar with what happened to East Prussia in 1945 would know that it's not the first line of Russian soldiers that are the humanitarian problem so much as the secondary line of not-so-Russians.

Meanwhile, Human Rights Watch, a group that is also pro-abortion, anti-capital punishment, and pro-gay rights, says that a "massive Russia propaganda machine" is at work here.

Tuesday, August 12, 2008

ex-Republics regress towards failed states

The Reuters story "Moldovan separatists break off talks over Georgia" doesn't surprise me. Having driven the separatist thorn deeper into Georgia's side, Moscow has sent a message to the rest of its former republics.

What's frustrating for me is the way people equivocate between Slobodan Milosevic's Serbia and the Georgia of the Rose Revolution. All separatists were not created equal, nor all countries with separatist enclaves. I've been to Transdniester, and it is the most corrupt "country" of the 50+ I've travelled in the last four years. It combines smuggling and gangsterism with Soviet nostalgia. When I exited Moldova into Romania, the Moldovan border guards were professional and honest. Yet they will never be part of an EU country so long they can't get a grip on their eastern border. It suits Moscow perfectly fine if the ex-republics remain plagued by unresolved conflicts.

Although I never entered South Ossetia while I was in Georgia, I find it entirely plausible that it's a hornet's nest of crime and smuggling with thugs as its nominal leaders. However sympathetic one might be inclined to be to the Ossetians in theory, from my experience of Georgians and Russians or Russian allies like Transdniester, I find it preposterous to suggest that the 20 000 ethnic Georgians in South Ossetia would have their human rights better protected by Putin or Putin supporters than the 50 000 ethnic Ossetians would have their human rights protected by Saakashvili. The New York Times reports that Hillary Clinton signed McCain's letter nominating the young Georgian President for the 2005 Nobel Peace Prize.

This is not to say that the Georgians struck me as southern Finns. I didn't see the mentality one finds in a western democracy at every turn. But what I did see were developing cultural norms that are the critical enablers of progress towards that goal, and in light of that I believe due allowance should be made for any exaggerating that may have occured in the communications of the Georgian government this past week. Are the Estonians, Latvians, and Lithuanians sympathetic to small ethnic groups? Of course they are. But they know what the real deal is here, and accordingly don't project onto the South Ossetians some sort of liberal self-determination thesis that does not square with the facts on the ground. Anyone who is familiar with what happens in wars would not be the least bit surprised if the Ossetians are getting their vengeance while I write on the Georgians in South Ossetia who are no longer protected by the Georgian government.

Whatever the faults of the Georgians, Moscow is running an extremely sophisticated propaganda operation with respect to colouring how the world sees them, and suggesting people try to look through that is not to say that they are somehow angels next to Russian demons. It's rather to say that there is no real substitute to actually going to the region and drawing one's own conclusions.

NATO and the EU do not invite just any tinpot dictatorship or banana republic to join their club. On the contrary, they have standards. What the White House proposed in Bucharest was extending a "map" towards membership to Georgia. This "map" largely coincides with political and economic progress, but a great many people seem to think that the fact the derailer of this process is a foil to the USA is all the reason they need to cheer the result.

The colour revolutions stumbled this week on the rocks Moscow threw in front of them and I find it a very regrettable development in the human journey towards prosperity and freedom of expression.

See this New York Times link for some excellent backgrounders.

"gonna keep on rollin', baby"

to quote Fred Durst...
"Attacks on Georgia continue despite Russian president's calls to halt"
and
"Russians shells Gori despite claims Georgia conflict is over"

Meanwhile, on the coast:

In Poti, a port city in western Georgia, a New York Times correspondent heard bombs falling ...
Residents and officials were tense as Russian troops drove through the city, talking to residents. They appeared to be digging into positions on the city’s outskirts. There were reports that Russian troops were engaged in similar activities in the western Georgian towns of Zugdidi and Kareli, an American official said.
About four miles outside Poti, a dozen armored vehicles guarded a bridge and the road onwards to Batumi, another Black Sea port. The troops, who spoke Russian and wore patches indicating they were paratroopers, said they were peacekeepers.


I ended up spending a couple days in Poti last fall, because I was trying to get on a freighter to the Ukraine and its departure kept getting delayed.

Monday, August 11, 2008

DailyKos blogger denounces Moscow

This DailyKos post is a remarkable illustration of how elements of the US left have decided to adopt McCain's position of supporting the Baltics' view of the Georgia situation. The post calls attention to the wire story "Russia Warns Baltics, Poland To Pay For Georgia Stance".

The position of the Baltic State Presidents evidently reflects the popular will, given the demonstrations there.

Meanwhile, the Moscow rebuffs the French.

Russia Today reportedly hired a westerner named William Dunbar to report for them, but refused to broadcast his reporting because it didn't serve the Kremlin's propaganda line. According to Dunbar,

I felt that I had no choice but to resign. I had a series of live, video satellite links scheduled for later that day, and they were cancelled. The real news, the real facts of the matter, didn't conform to what they were trying to report, and therefore, they wouldn't let me report it.


Abkhazia is more strategically vital than South Ossetia. The Georgians made no moves towards Abkhazia yet the Russian buildup there has been significant and Russian "peacekeepers" advanced as far beyond Abkhazia as Senaki, which cut the rail connection between the Georgian capital and the coast. What really matters to Moscow here is derailing any progress towards an internationally mediated settlement in Abkhazia. If the Georgians understood that they would have retreated west from South Ossetia towards Abkhazia as opposed to east towards Tbilisi. A Russian drive on Tbilisi was always unlikely because the world community would be unlikely to tolerate an unlimited war of conquest, but Georgian paranoia infected their communications to the point that their credibility is somewhat damaged. The next time they cry, "the Russians are coming!" the western media will suspect the Georgians are exaggerating.

I'm a little disappointed...















in the Georgian military performance so far. According the Guardian, the attached photo is "on the road to Tbilisi".

The UK Telegraph says "Georgians were witnessed by the Telegraph in a full scale disorganised and panicked retreat from Gori." I hope that's Georgian civilians, but given reports that the Russians overran Senaki, which on the main rail line between the Georgian capital and the coast (I took an overnight train through Senaki from Tbilisi last October), it sounds like it could be the Georgian military that's in full retreat. The Associated Press says one of their film crews "saw Georgian tanks and military vehicles speeding along the road from Gori to Tbilisi. Firing began and people ran for cover. Cars could be seen in flames along the side of the road."

I took a day trip to Gori while I was in the country last autumn and I'm sorry to hear that the Russians bombed it and sorrier still to think that the Georgians may have abandoned it without much of a fight. That said, I can appreciate the importance to trying to set up a defensive line around the capital. I just think it is something of a propaganda coup for the Russians if they can go on the rampage in the rest of the country, destroy everything, and then pull back saying they are peace lovers because they didn't bear down on the capital.


Sunday, August 10, 2008

McCain wisely endorses statement by Eastern Europeans on Georgia

I have my reservations with McCain, and I've expressed them. But the fact remains that intelligent and well-spoken liberals like Michael Kingsley consider McCain "honest, courageous, likable and intelligent."

Would I prefer that McCain had a more (Obama-like) cerebral bearing and approach? Of course. But whether McCain "gets it" with the Russians because of an evidence-based approach or because of a skeptical intuition that happens to be correct ultimately doesn't matter in the end.

Fact is, McCain is right on the money to "strongly support" the Joint Declaration of Estonian, Latvian, Lithuanian and Polish Presidents on the situation in Georgia. Having visited 11 former Soviet republics within the last two years I can tell you that that declaration is not the least bit surprising. The eastern Europeans know what real imperialism looks like. Real imperialism simply doesn't give a damn about other countries think. There is no reasoning with it, no moral conscience to appeal to, no point in trying to argue at all.

US imperialism is an imperialism that's obvious to the good professors of Post Colonial Studies (imposing the "corporate agenda" on long suffering brown people) but far from obvious to sub-Saharan Africans (with whom GWB is quite popular) or ordinary people on the ground in regions that attract the interest of Moscow or Beijing.

Far from there being no point in arguing with US-style imperialism, its opponents essentially argue against it non-stop. This very fact is a tacit recognition that Americans recognize rules about how the game should be played, such that it is worth one's time to appeal to those rules.

I don't support the neo-cons. I've long considered myself either a libertarian or a paleo-con. The neo-cons are liberals who became cynical about the means while remaining idealistic about the ends. I've been a cynic since day 1. I don't like Cheney, or Rumsfeld, or Bolton. But many Canadians compare the US against some abstract, hypothesized idea of ideal behaviour in a mental exercise that much of the world doesn't have the luxury of engaging in. The eastern Europeans know that US foreign policy leaves a lot to be desired. But it's far preferable to Russian power and, indeed, nobody has the American back in the Middle East like the eastern Europeans do.

The notion that South Ossetia's right to self-determination is being crushed by the Georgians is another one of these academic exercises. Thinktanks without a radical-left bias have long recognized that the Russians have been building a hornet's nest of smugglers, criminals, and other agents of destabilization for years now, and when the Georgians finally got stung so many times they decided to take a whack at it, the Russians had exactly the propaganda narrative they wanted. Press coverage of Russia's cyberwar against Georgian and Baltic websites in July was limited, as was coverage of Russian violations of Georgian airspace. The Russians themselves have never recognized any independence referenda in South Ossetia as valid, nor have they recognized South Ossetia as legally independent of Georgia. If this were truly about self-determination for the Ossetians, the Russians would have recognized that legally first before invading. The Baltic states, of course, have no time for the Russian claims of protecting the innocent because they've got substantial Russian minorities of their own (imported during the Soviet occupation) and know how the Russians use "protecting Russians" as a pretext for interference.

The equivalency I've seen drawn between the west's stance on Kosovo and Russia on South Ossetia does not follow. The west's recognition of Kosovo followed a Russian rejection of a UN proposal that never mentioned "independence" or talked of an "independent" Kosovo. Slobodan Milosevic's extended campaign of ethnic cleansing in Kosovo was internationally verified and recognized, with the result that more than a dozen nations decided on a proportionate, air only response to Milosevic. Milosevic wanted international involvement out, Saakashvili wants it in.

Whether McCain came to his cynicism of Russian intentions by temperament or by reflective experience, McCain is seeing Russia as those closest to the real Russia see it.

Saturday, August 9, 2008

"THEY'VE COME FOR YOUR PEACHES!"



Best answer:

Russians are very stealthy creatures. Kind of like ninjas. They are probably hiding in your kitchen right now...give yourself up, they will be merciful.