1. I've never been a big believer of this but I can't make up my mind after this article:
In the surrounding steep valleys, hundreds of defunct silver and gold mines pock the slopes with log-framed portals and piles of waste rock. When water flows over the exposed, mineral-laden rock in and around the mines, it dissolves zinc, cadmium, lead, and other metals. The contaminated water, sometimes becoming acidic enough to burn skin, then dumps into nearby streams. So-called acid mine drainage, most of it from abandoned boom-time relics, pollutes an estimated 12,000 miles of streams throughout the West—about 40 percent of western waterways. ...
... But as these volunteers prepare to tackle the main source of the pollution, the mines themselves, they face an unexpected obstacle—the Clean Water Act. Under federal law, anyone wanting to clean up water flowing from a hard-rock mine must bring it up to the act’s stringent water-quality standards and take responsibility for containing the pollution—forever. Would-be do-gooders become the legal “operators” of abandoned mines like those near Silverton, and therefore liable for their condition.
2. Should FOIA apply to journalists?
... does the press always get to decide whose secrets trump? What bothers me most about the cult of the source is the press’s insistence on its right to ignore due process of law and refuse to reveal sources even after the issue has been fully litigated. Fine: appeal it up to the Supreme Court if you want, but in a democracy with an (all but) uncorrupted judiciary, if you ultimately lose, you should obey the law as it is, not as you would like it to be.
Tuesday, July 20, 2010
The Malaysian Connection
I had known about the letter from Malaysia in the anthrax case, recounted very well here and about Stephen Hatfill. What I hadn't known was this titbit:
His girlfriend was Malaysian-born—and a hoax package had been sent from Malaysia to a Microsoft office in Nevada.
The article does not explain how the subsequent suspect Bruce Edward Ivins managed to mail a package from Malaysia though I suspect these kinds of things are easily done.
The article was enjoyable though it was hard not to see why the FBI considered Hatfill a suspect (unless he was being set-up - I may be watching too much TV). In the end, this is a tale of how we can all buckle when the weight of one organization (not just the government) comes down on us.
His girlfriend was Malaysian-born—and a hoax package had been sent from Malaysia to a Microsoft office in Nevada.
The article does not explain how the subsequent suspect Bruce Edward Ivins managed to mail a package from Malaysia though I suspect these kinds of things are easily done.
The article was enjoyable though it was hard not to see why the FBI considered Hatfill a suspect (unless he was being set-up - I may be watching too much TV). In the end, this is a tale of how we can all buckle when the weight of one organization (not just the government) comes down on us.
China and Africa
A preface excerpted from The Atlantic:
“Statistics are hard to come by, but China is probably the biggest single investor in Africa,” said Martyn Davies, the director of the China Africa Network at the University of Pretoria. “They are the biggest builders of infrastructure. They are the biggest lenders to Africa, and China-Africa trade has just pushed past $100 billion annually.”
Davies calls the Chinese boom “a phenomenal success story for Africa,” and sees it continuing indefinitely. “Africa is the source of at least one-third of the world’s commodities”—commodities China will need, as its manufacturing economy continues to grow—“and once you’ve understood that, you understand China’s determination to build roads, ports, and railroads all over Africa.”
Davies is not alone in his enthusiasm. “No country has made as big an impact on the political, economic and social fabric of Africa as China has since the turn of the millennium,” writes Dambisa Moyo, a London-based economist, in her influential book, Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa. Moyo, a 40-year-old Zambian who has worked as an investment banker for Goldman Sachs and as a consultant for the World Bank, believes that foreign aid is a curse that has crippled and corrupted Africa—and that China offers a way out of the mess the West has made.
Some additional links:
1. Via Chris Blattman
2. Foreign Affairs:
Why would the Chinese government push some of its labor- and energy-intensive industries to move to special economic zones in Africa, even as the U.S. Congress bans the U.S. Agency for International Development from financing any activities that could relocate the jobs of Americans overseas? Because Chinese planners want industrialists at home to move up the value chain. Polluting industries such as leather tanneries and metal smelters are no longer tolerated in many Chinese cities.
3. The Atlantic (interesting throughout):
Many Chinese agricultural initiatives are shrouded in mystery. In 2006, for instance, China offered a $2 billion soft loan to Mozambique for a project to dam the Zambezi River Valley, amid some of the continent’s most fertile soils. The following year, Chinese and Mozambican officials reportedly signed a memorandum of understanding allowing 3,000 Chinese settlers to begin farming in the area. But following a local uproar, Mozambique’s government denied all reports of the plan, and little has been heard of it since. ...
... The stop-and-go quality of major Chinese farming deals and the strong feelings that they’ve produced suggest that the honeymoon between the Chinese and Africans may not last long. During the course of my trip, land issues seemed to bring out the ugliest biases in the people I spoke to. “If you gave this land to Chinese people to work it, this place would be rich overnight,” said one Chinese woman immigrant, a middle-aged trader in southern Congo: “They’re too lazy, these Africans.” Many Africans, for their part, were intensely wary of Chinese immigration; Daniel told me that this was a particularly raw issue among many of his friends. Conspiracy theories echoed frequently. In Dar, for instance, rumors had spread that the new national sports stadium was part of a secret deal to grant land to Chinese farmers in Tanzania.
... Many Chinese fortune seekers had hired African work gangs to dig for copper, sometimes even in Lubumbashi’s red-clay streets. “They were profiteers and speculators,” said one local businessman. “Congo got nothing from them.” Most of them dug “no more than 20 feet deep, which requires no investment at all.” The government belatedly tried to reassert control, requiring all those who mined copper to smelt it as well, and to make more-substantial investments in equipment, in order to generate more jobs and tax revenue and to make the industry more sustainable. In response, small operators scrambled to build small, inefficient furnaces. In 2008, as prices tumbled from $9,000 a ton to a low of $3,500, the makeshift smelters closed down and the Chinese owners fled, leaving their Congolese workers unpaid and the landscape littered with industrial refuse.
“Statistics are hard to come by, but China is probably the biggest single investor in Africa,” said Martyn Davies, the director of the China Africa Network at the University of Pretoria. “They are the biggest builders of infrastructure. They are the biggest lenders to Africa, and China-Africa trade has just pushed past $100 billion annually.”
Davies calls the Chinese boom “a phenomenal success story for Africa,” and sees it continuing indefinitely. “Africa is the source of at least one-third of the world’s commodities”—commodities China will need, as its manufacturing economy continues to grow—“and once you’ve understood that, you understand China’s determination to build roads, ports, and railroads all over Africa.”
Davies is not alone in his enthusiasm. “No country has made as big an impact on the political, economic and social fabric of Africa as China has since the turn of the millennium,” writes Dambisa Moyo, a London-based economist, in her influential book, Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa. Moyo, a 40-year-old Zambian who has worked as an investment banker for Goldman Sachs and as a consultant for the World Bank, believes that foreign aid is a curse that has crippled and corrupted Africa—and that China offers a way out of the mess the West has made.
Some additional links:
1. Via Chris Blattman
2. Foreign Affairs:
Why would the Chinese government push some of its labor- and energy-intensive industries to move to special economic zones in Africa, even as the U.S. Congress bans the U.S. Agency for International Development from financing any activities that could relocate the jobs of Americans overseas? Because Chinese planners want industrialists at home to move up the value chain. Polluting industries such as leather tanneries and metal smelters are no longer tolerated in many Chinese cities.
3. The Atlantic (interesting throughout):
Many Chinese agricultural initiatives are shrouded in mystery. In 2006, for instance, China offered a $2 billion soft loan to Mozambique for a project to dam the Zambezi River Valley, amid some of the continent’s most fertile soils. The following year, Chinese and Mozambican officials reportedly signed a memorandum of understanding allowing 3,000 Chinese settlers to begin farming in the area. But following a local uproar, Mozambique’s government denied all reports of the plan, and little has been heard of it since. ...
... The stop-and-go quality of major Chinese farming deals and the strong feelings that they’ve produced suggest that the honeymoon between the Chinese and Africans may not last long. During the course of my trip, land issues seemed to bring out the ugliest biases in the people I spoke to. “If you gave this land to Chinese people to work it, this place would be rich overnight,” said one Chinese woman immigrant, a middle-aged trader in southern Congo: “They’re too lazy, these Africans.” Many Africans, for their part, were intensely wary of Chinese immigration; Daniel told me that this was a particularly raw issue among many of his friends. Conspiracy theories echoed frequently. In Dar, for instance, rumors had spread that the new national sports stadium was part of a secret deal to grant land to Chinese farmers in Tanzania.
... Many Chinese fortune seekers had hired African work gangs to dig for copper, sometimes even in Lubumbashi’s red-clay streets. “They were profiteers and speculators,” said one local businessman. “Congo got nothing from them.” Most of them dug “no more than 20 feet deep, which requires no investment at all.” The government belatedly tried to reassert control, requiring all those who mined copper to smelt it as well, and to make more-substantial investments in equipment, in order to generate more jobs and tax revenue and to make the industry more sustainable. In response, small operators scrambled to build small, inefficient furnaces. In 2008, as prices tumbled from $9,000 a ton to a low of $3,500, the makeshift smelters closed down and the Chinese owners fled, leaving their Congolese workers unpaid and the landscape littered with industrial refuse.
Why Washington is the way it is
According to Jeff Goldberg:
In some places (though not in the District of Columbia, where I also live) it is legal to reserve a parking spot using lawn furniture until the streets are cleared. I once would have agreed that this is an unfriendly practice, but this winter’s storms convinced me otherwise. I live in a special area of Washington that was established by the federal government as a reservation for former employees of Ralph Nader, and while my neighbors are thoughtful people who support our local NPR affiliate and believe that War Is Not the Answer, they’re not very good at shoveling snow. This may be because, as liberals, they believe that street-clearing is the job of the government. Or because they think that mechanical snowblowers cause global warming. ...
In some places (though not in the District of Columbia, where I also live) it is legal to reserve a parking spot using lawn furniture until the streets are cleared. I once would have agreed that this is an unfriendly practice, but this winter’s storms convinced me otherwise. I live in a special area of Washington that was established by the federal government as a reservation for former employees of Ralph Nader, and while my neighbors are thoughtful people who support our local NPR affiliate and believe that War Is Not the Answer, they’re not very good at shoveling snow. This may be because, as liberals, they believe that street-clearing is the job of the government. Or because they think that mechanical snowblowers cause global warming. ...
Orthodontics and obesity
K1 needs (?) expanders. This much we found out a month ago. The orthodontist also recommended the removal of 2 canines to facilitate the permanent teeth that were coming out.
There were two things we could have done, both of which I would have wanted to avoid.
1. Get a second opinion.
2. Go with the recommendation.
I don't see how either option can contribute to the reduction in health care costs (assuming dental is part of health care). Neither my spouse nor I had braces or orthondists and neither of us have perfect teeth and our feelings were - so what? But I had read an account of how at age 47 she decided to get braces and how her teeth bugged her through most of her life and really, who wants this for their kids.
So we went with #2. We went ahead with the extraction - not too bad - $290, and the expanders will cost $4000 over possibly 2 years or less (before braces). We're not quite sure how much of it insurance actually covers (yet) but one small contribution to the cost of escalating health care would be to remove insurance coverage of orthodontics except for injurious cases (e.g. plastic surgery for burn victims). It would certainly make us think harder about orthodontics.
Yet, with all the rising costs of obesity, as recounted by Mark Ambinder, the benefits of bariatric surgery is still unknown and hence not covered by insurance.
In the half century since surgeons began performing bariatric procedures, the surgery’s mortality rate has declined to half of 1 percent, and its long-term success rate—people who keep at least 50 percent of their excess body weight off for several years—has become exceptional. For reasons clinicians still don’t quite understand, the surgery seems to cure diabetes, sometimes instantly. The surgery does not work for everyone: some people who endure it will essentially regrow their stomachs and gain back the weight. Though the rate of minor complications can exceed 30 percent, the incidence of more-severe complications is less than 3 percent. But the procedure is still an equalizing force: for a honeymoon period, about six months to a year after surgery, it allows you to resist the environmental and physical pressures that intensify appetite and food addiction.
...For young adults who cross a certain weight threshold, bariatric surgery can be an effective preventive step. Its incidence among all adults doubled over six years, to 220,000 surgeries in 2008. And it seems to be increasingly prevalent among obese teenagers: one study suggests that from 2000 to 2003, the number of teens resorting to the procedure tripled. But it’s major surgery, and specialists aren’t comfortable doing it as a preventive measure. Moreover, many insurance companies (including mine) refuse to pay the $30,000 cost, reasoning that any economic benefit they would recoup is years down the road.
There were two things we could have done, both of which I would have wanted to avoid.
1. Get a second opinion.
2. Go with the recommendation.
I don't see how either option can contribute to the reduction in health care costs (assuming dental is part of health care). Neither my spouse nor I had braces or orthondists and neither of us have perfect teeth and our feelings were - so what? But I had read an account of how at age 47 she decided to get braces and how her teeth bugged her through most of her life and really, who wants this for their kids.
So we went with #2. We went ahead with the extraction - not too bad - $290, and the expanders will cost $4000 over possibly 2 years or less (before braces). We're not quite sure how much of it insurance actually covers (yet) but one small contribution to the cost of escalating health care would be to remove insurance coverage of orthodontics except for injurious cases (e.g. plastic surgery for burn victims). It would certainly make us think harder about orthodontics.
Yet, with all the rising costs of obesity, as recounted by Mark Ambinder, the benefits of bariatric surgery is still unknown and hence not covered by insurance.
In the half century since surgeons began performing bariatric procedures, the surgery’s mortality rate has declined to half of 1 percent, and its long-term success rate—people who keep at least 50 percent of their excess body weight off for several years—has become exceptional. For reasons clinicians still don’t quite understand, the surgery seems to cure diabetes, sometimes instantly. The surgery does not work for everyone: some people who endure it will essentially regrow their stomachs and gain back the weight. Though the rate of minor complications can exceed 30 percent, the incidence of more-severe complications is less than 3 percent. But the procedure is still an equalizing force: for a honeymoon period, about six months to a year after surgery, it allows you to resist the environmental and physical pressures that intensify appetite and food addiction.
...For young adults who cross a certain weight threshold, bariatric surgery can be an effective preventive step. Its incidence among all adults doubled over six years, to 220,000 surgeries in 2008. And it seems to be increasingly prevalent among obese teenagers: one study suggests that from 2000 to 2003, the number of teens resorting to the procedure tripled. But it’s major surgery, and specialists aren’t comfortable doing it as a preventive measure. Moreover, many insurance companies (including mine) refuse to pay the $30,000 cost, reasoning that any economic benefit they would recoup is years down the road.
Data deluge or why data is not information
This series looks like it could shape up to be another Pulitzer for WaPo.
Some random thoughts:
1. Workers with marginal productivity of zero.
2. Why has there not been a greater fiscal stimulus?
3. This gallery shows that the government has almost everything 24 and NCIS has, yet the data deluge is tremendous.
4. The paradox of more data is that there is less information which is why I'm not so worried about privacy when it is in the hands of the government. In private hands with private incentives and goals on the other hand .... So, its the private contractors, analysts, and anyone with a private agenda.
5. #4 cries out for a super-super computer that will tell us all it knows (and run the world).
6. In all software or data projects decreasing returns to scale is the norm.
Some random thoughts:
1. Workers with marginal productivity of zero.
2. Why has there not been a greater fiscal stimulus?
3. This gallery shows that the government has almost everything 24 and NCIS has, yet the data deluge is tremendous.
4. The paradox of more data is that there is less information which is why I'm not so worried about privacy when it is in the hands of the government. In private hands with private incentives and goals on the other hand .... So, its the private contractors, analysts, and anyone with a private agenda.
5. #4 cries out for a super-super computer that will tell us all it knows (and run the world).
6. In all software or data projects decreasing returns to scale is the norm.
Inflation or deflation
The Economist asks a simple question (and given that I had made a portfolio reallocation decision based on my answer - and perhaps a wrong answer at that) I was interested in seeing what the participants of the forum had to say.
1. Ricardo Caballoro, MIT: On average (across the world), inflation is not and will not be a concern for quite a while.
2. Arminio Fraga, Gavea Investimentos: In the near term, the excess capacity found in most advanced economies pushes prices down. But central banks know how to pump up aggregate demand and fix this, it is just a matter of time. So deflation is not a lasting threat.
3. Stephen Roach, Morgan Stanley: ... as I look out over the next five years, I see a good case for both another whiff of deflation only to be followed by an outbreak of accelerating inflation. The sequencing is key. I worry that fears of deflation will lead to yet another spate of policy blunders that could ultimately set the stage for meaningful deterioration on the inflation front.
4. Gilles St. Paul, CEPR: As long as the recession continues, the risk of inflation is small. However, the scenario of a return to high inflation as we exit the crisis should not be dismissed, for a number of reasons.
5. Adam Posen, IIE: Most macroeconomists instinctively believe that deflation is bad, and we certainly can generate a list of reasons why that should be so.
6. Stephen King, HSBC: The Western world is in danger of following in Japan’s deflationary footsteps.
7. Scott Sumner, Brandeis: I believe that the US and Europe are unlikely to experience outright deflation in the foreseeable future.
8. John Makin, Caxton Associates: Deflation is currently a greater threat to the world economy than inflation.
9. Tom Gallagher, ISI: ... neither inflation nor deflation is the base case, the arguments against inflation are stronger, so I worry more about deflation.
Some answers were more straightforward than others. (I excluded Brad DeLong only because his response wasn't easy to excerpt but he definitely falls in the deflation camp.) Except for Stephen Roach, no one really gave a time frame (Roach says 5 years). And some economists tend to couch their responses with more caveats than others - perhaps this is an inate ability of economists to cover our asses.
Here is Jim Hamilton (which sounds extremely crisp and clear to my ears):
For the last year and a half my assessment has been that the near-term pressures on the U.S. economy were deflationary, while long-term fundamentals involve significant inflation risks. It's time for a look at the data that have come in over the last 6 months, and time to say that I still see things exactly the same way.
... I often hear the idea expressed that all the money that the Federal Reserve has created through its various responses to to the financial crisis has to produce inflation. With the exception of the assets the Fed acquired through the AIG deal, which aren't going anywhere, most of the other special facilities the Fed implemented in the fall of 2008 have been wound down, replaced with long-term holdings of mortgage-backed securities and agency debt.
... The source of my concern about long-run inflation comes not from the expansion of the Fed's balance sheet, but instead from worries about the ability of the U.S. government to fund its fiscal expenditures and debt-servicing obligations as we get another 5 or 10 years down the current path. Just as many analysts have had trouble seeing how Greece can reasonably be expected over the near term to move to primary surpluses sufficient to meet its growing debt servicing costs, I have similar problems squaring the numbers for the U.S. looking a little farther ahead.
... I am definitely not among those calling for current budget cuts-- that would only aggravate our immediate employment challenges. But I do think now would be an excellent time for fiscal reforms that make the long-run math look substantially more responsible. Examples include raising the eligibiity age for Social Security and Medicare, increasing the Medicare copay, budget reform to bring earmarks under control, a plan to ease the government out of responsibiity for implicitly or explicitly guaranteeing U.S. mortgage debt, and reforms at the state and local government level to bring their long-run pension liabilities under control.
Menzie Chinn Follows up with some more graphs (and he is also in the deflation camp). Subsequently, Jim Hamilton lists some ideas as to how to fight deflation.
And from Mark Thoma, the Feds may have a schizophrenic view perhaps due to salty and fresh economists:
Atlanta Fed:
Since last October, the consumer price index (CPI) has gone up an annualized 0.7 percent. On an ex-food and energy basis, the number is a little lower, at 0.5 percent. And the Cleveland Fed's trimmed-mean and median CPIs, at 0.7 percent and 0.2 percent, respectively, also put the recent trend in consumer prices in pretty low territory.
While the Richmond Fed:
The recent spate of weaker economic data doesn’t mean the U.S. recovery is faltering, and the Federal Reserve continues to get closer to the time when it will need to raise interest rates... Lacker believes, like many other Fed officials, that the economy doesn’t yet need fresh support from the Fed.
which drew the following comment from Mark Thoma:
What's he afraid of? Inflation?
1. Ricardo Caballoro, MIT: On average (across the world), inflation is not and will not be a concern for quite a while.
2. Arminio Fraga, Gavea Investimentos: In the near term, the excess capacity found in most advanced economies pushes prices down. But central banks know how to pump up aggregate demand and fix this, it is just a matter of time. So deflation is not a lasting threat.
3. Stephen Roach, Morgan Stanley: ... as I look out over the next five years, I see a good case for both another whiff of deflation only to be followed by an outbreak of accelerating inflation. The sequencing is key. I worry that fears of deflation will lead to yet another spate of policy blunders that could ultimately set the stage for meaningful deterioration on the inflation front.
4. Gilles St. Paul, CEPR: As long as the recession continues, the risk of inflation is small. However, the scenario of a return to high inflation as we exit the crisis should not be dismissed, for a number of reasons.
5. Adam Posen, IIE: Most macroeconomists instinctively believe that deflation is bad, and we certainly can generate a list of reasons why that should be so.
6. Stephen King, HSBC: The Western world is in danger of following in Japan’s deflationary footsteps.
7. Scott Sumner, Brandeis: I believe that the US and Europe are unlikely to experience outright deflation in the foreseeable future.
8. John Makin, Caxton Associates: Deflation is currently a greater threat to the world economy than inflation.
9. Tom Gallagher, ISI: ... neither inflation nor deflation is the base case, the arguments against inflation are stronger, so I worry more about deflation.
Some answers were more straightforward than others. (I excluded Brad DeLong only because his response wasn't easy to excerpt but he definitely falls in the deflation camp.) Except for Stephen Roach, no one really gave a time frame (Roach says 5 years). And some economists tend to couch their responses with more caveats than others - perhaps this is an inate ability of economists to cover our asses.
Here is Jim Hamilton (which sounds extremely crisp and clear to my ears):
For the last year and a half my assessment has been that the near-term pressures on the U.S. economy were deflationary, while long-term fundamentals involve significant inflation risks. It's time for a look at the data that have come in over the last 6 months, and time to say that I still see things exactly the same way.
... I often hear the idea expressed that all the money that the Federal Reserve has created through its various responses to to the financial crisis has to produce inflation. With the exception of the assets the Fed acquired through the AIG deal, which aren't going anywhere, most of the other special facilities the Fed implemented in the fall of 2008 have been wound down, replaced with long-term holdings of mortgage-backed securities and agency debt.
... The source of my concern about long-run inflation comes not from the expansion of the Fed's balance sheet, but instead from worries about the ability of the U.S. government to fund its fiscal expenditures and debt-servicing obligations as we get another 5 or 10 years down the current path. Just as many analysts have had trouble seeing how Greece can reasonably be expected over the near term to move to primary surpluses sufficient to meet its growing debt servicing costs, I have similar problems squaring the numbers for the U.S. looking a little farther ahead.
... I am definitely not among those calling for current budget cuts-- that would only aggravate our immediate employment challenges. But I do think now would be an excellent time for fiscal reforms that make the long-run math look substantially more responsible. Examples include raising the eligibiity age for Social Security and Medicare, increasing the Medicare copay, budget reform to bring earmarks under control, a plan to ease the government out of responsibiity for implicitly or explicitly guaranteeing U.S. mortgage debt, and reforms at the state and local government level to bring their long-run pension liabilities under control.
Menzie Chinn Follows up with some more graphs (and he is also in the deflation camp). Subsequently, Jim Hamilton lists some ideas as to how to fight deflation.
And from Mark Thoma, the Feds may have a schizophrenic view perhaps due to salty and fresh economists:
Atlanta Fed:
Since last October, the consumer price index (CPI) has gone up an annualized 0.7 percent. On an ex-food and energy basis, the number is a little lower, at 0.5 percent. And the Cleveland Fed's trimmed-mean and median CPIs, at 0.7 percent and 0.2 percent, respectively, also put the recent trend in consumer prices in pretty low territory.
While the Richmond Fed:
The recent spate of weaker economic data doesn’t mean the U.S. recovery is faltering, and the Federal Reserve continues to get closer to the time when it will need to raise interest rates... Lacker believes, like many other Fed officials, that the economy doesn’t yet need fresh support from the Fed.
which drew the following comment from Mark Thoma:
What's he afraid of? Inflation?
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