Tuesday, January 16, 2018

Are Voters In Nations With A Poland Problem Especially Sophisticated?

The argument here is that a nation with a Poland problem has a disconnect between its economic conditions and its political  outcomes.  It could be argued that in such a case the voters of that nation may realize that elected leaders (especially presidents in the US) have much less control over economic outcomes than voters in most nations give them credit or blame for.  So they vote on other issues.

Of course in many such cases, notably the US and Poland itself, those issues seem to revolve heavily around hatred of immigrants and asserting a racist nationalism of an extreme variety.  What is more this has often involved making exaggerated, if not downright incorrect, claims about the impact of immigrants on national economies.  This becomes especially unsophisticated when those making these appeals outright lie about the state of the economy, declaring that the economy is in much worse shape than it is and then blaming the supposed terrible shape on the immigrants.

Thus in the US we had Trump claiming that improving employment numbers were fake news, and that the BLS was engaging in fraudulent and inaccurate measuring and reporting of the improving employment numbers.  Then, of course, the supposedly much worse employment situation in the US that we really had according to him was mostly due to immigrants coming in and taking jobs (he was more accurate in his complaints that in Midwestern rust belt loss of manufacturing jobs was partly due to imports).  Then the minute he got in office and the employment situation continued to improve at about the rate it had been doing so, well, all of a sudden the BLS was accurate, and the improving employment situation was all due to him, as was the rising stock market he had previously ignored was suddenly the most important thing around.

The irony in this particular situation is that the US's Poland problem has come back to bite Trump. Even though indeed the economy is continuing to improve since  Trump has taken power, it is not helping Trump at the polls at all, with him having the lowest poll ratings for a new president we have seen since reliable polling began.  Some of that is indeed that people do not believe he has had much to do with the state of the economy so far, but probably most of it is simply people focusing on the other things he is doing, including the extreme racism of his anti-immigrant policy, which has ceased to be the vote getter it was earlier.

Barkley Rosser  

Sunday, January 14, 2018

A Reminder That It Was George W. Bush Who Was Responsible For Letting North Korea Get Nuclear Weapons

Tyler Cowen on Marginal Revolution has provided a link to a 2004 article from Washington Monthly by Fred Kaplan that lays out in great detail how George W. Bush, strongly backed by Cheney and Rumsfeld and against the views of Colin Powell, undid the agreement that Jimmy Carter and Bill Clinton made with the North Koreans in 1994 to shut down the North's plutonium production program for nuclear weapons.  I have blogged on tis here previously, but this article included more details than I had been aware of while confirming all I had previously said here previously about this unfortunate matter, which remains largely unknown to the vast majority of Americans.  One detail is indeed how Bush's obsession with invading Iraq (ironically supposedly to get rid of nonexistent WMDs there) contributed to his complete failure to stop North Korea from building these weapons.

Ironically even Trump looks almost good in comparison with Bush on the matter of destroying agreements made by predecessors that put a potential nuclear power that is hostile in a box regarding its program.  In the case of Trump it is Obama's agreement with Iran, which he regularly denounces and threatens to repeal and indeed nibbles at the edges of by adding new sanctions on Iran. But he has just for the third time recertified that Iran is keeping to the agreement, even as he threatened once again to repeal it if it does not get "fixed."  It would seem that the difference between the Bush and Trump situations is that while the main foreign policy advisers around Trump, Mattis, McMaster, and Tillerson, are clearly working to keep the agreement going, most of those around Bush, especially Cheney and Rumsfeld, were also keen on ending the agreement with North Korea, convinced that they could bring about the collapse of the North Korean regime, which, needless to  say, they failed to achieve, even as they handed a nuclear North Korea to all of us now.

The article also provides details on the matter of how Bush treated South Korean President Kim Dae Jung in a shameful and disrespectful manner in the months shortly after Bush took office, paving the way to the later collapse of the agreement with North Korea, a matter I have previously posted about here.  All of this is worth keeping in mind when we think that Bush was so much more reasonable than Trump.  Trump has done a lot of blundering, but so far has avoided doing anything nearly as dangerous or destructive as either invading Iraq or acting to push North Korea into getting nuclear weapons.

Barkley Rosser

Thursday, January 11, 2018

Negative Interest Rates and a Term Structure Puzzle

James Hamilton provided us with another interesting discussion on negative interest rates:
we now have several years of experience from Sweden, Denmark, Switzerland, Japan, and the European Central Bank in which the central bank successfully induced negative interest rates in hopes of stimulating a greater level of spending on goods and services.
Please read the entire post including some interesting comments. Alas I must be late to the party as I could not provide a reply to an interesting query from Barkley Rosser:
Does anybody have an explanation as to why when a nation has negative nominal target interest rates it often seems that the time horizon of government securities that end up having the most negative rates are often at the two years time horizon? Look at the Sweden case, where this has been the case, and it has also been in quite a few other nations as well. I have yet to see an explanation of this peculiarly non-monotonic yield curve in this situation so often.
Maybe Europe has turned Japanese. I've been looking at an Excel file of their government bond rates provided by the Ministry of Finance (not the Bank of Japan). Japan had low but not negative interest rates before 2012 with a somewhat upward sloping term structure. Since 2012, two features describe this data: (1) one-year rates hovering around zero - sometimes positive and sometimes negative; (2) two-year rates hovering near the one-year rate and it times just below them. What is driving this? I have no answer.

Wednesday, January 10, 2018

Does the United States Have A "Poland Problem"?

It certainly looks like it.

Again, for anybody not having seen one of these, a "Poland problem" involves an apparent disconnect between economics and politics, nations with reasonably well performing economies where the populace becomes unhappy and supports opposition, especially "populist" nationalist authoritarian candidates, with 2015 victory in Poland of the Law and Justice Party the poster boy for this, even though Poland has been one of the best performing economies in Europe for quite some time.

The funny thing is that we may be seeing two separate rounds of this in the US. Thus we had Trump defeating Hillary even though the economy had been steadily growing for many years, unemployment steadily falling, and the stock market rising.  Now that Trump is in he has been trying to assert all this that has been going on for some time is due to him, which is silly apart perhaps from some of the upward stock market moves thanks to his pro-corporate profits policies.  But his popularity has fallen and is at lows not seen in many decades for a recently installed president.  Indeed, increasingly columnists of various stripes have begun to notice this disjuncture, alrhough they have not been providing a name for the syndrome as I have with "Poland problem." 

Of course it can be argued that things have not been and really are still not all that good economically.  We all know that that the widely touted unemployment rate overstates the strength  of the labor market given so many having dropped out of the labor force, and upward pressure on wages has remained weak, despite some improvement on that front recently.  Of course, Trump, having heard the story about labor force participation claimed at one point while running that the UR was really 42% and also  accused the BLS of cooking the unemployment numbers for political reasons, only to turn on a dime after getting in office to tout the low and falling standard UR numbers.

As it is, there are major problems in the US economy, deep inequality that has steadily worsened, entrenched poverty, especially in some regions and among certain groups.  But these are phenomena long in place.  Thus it is well known that supposedly the swing to Trump came from long building unhappiness in the rust belt Midwest, hollowed out by import competition, something that has been going on since at least the late 1970s.  It is unclear why that unhappiness has exploded now to support a racist authoritarian nationalist, but it has, and so  far it looks like Trump may be hanging on to this group better than some others, such as suburban women, even as he has done little for them.

More broadly internationally one can attribute much of this sourness to the long and slow recovery from the Great Recession.  Global growth has simply been slower, so that even in nations that have done well relative to others in the past decade such as the US, Germany, and Poland, people compare what has gone on with their own pasts, not with what is going on in other nations.  So a relatively good performance is not perceived as such, and a long building sourness rises to the surface.  We have not seen the end of this.

Barkley Rosser

Monday, January 8, 2018

Round numbers

0, 3, 6, 8, 9 and all their permutations.

As opposed to straight numbers (1, 4) and hybrids (2, 5, 7).

Presented as a public service.

Sunday, January 7, 2018

How Trump Killed The Anti-Government Protests In Iran

By very strongly and publicly supporting them and dragging the matter to the UN Security Council   Of course, his supporters have been praising his "strong action" in comparison with Obama's quiet approach to the 2009 demonstrations, meant to reduce accusations of the demonstraters being US pawns.  Those demos went on a long time with large numbers eventually killed.  In this case, Trump has made the government's case, and the demos seem to have all but stopped since he took his strong tweeting "action."

As it is, maybe he did them a favor as clearly the government has been prepared to crack down. Only 20 and one security person) this time.  His strong action has reduced the ultimate bloodshed.

Barkley Rosser

Thursday, January 4, 2018

Does Germany Have A Poland Problem?

Most definitely (hahahahahaha!).

Nobody seems to have picked up my coinage yet, but they are suddenly noticing the issue, although unable to label it. Just to be clear, having a "Poland problem" means that a nation's economy has become disconnected from its politics.  Thus Poland is the star transition economy that was the only nation in Europe not experience a decline in GDP in 2009, but its politics have gone sour with an authoritarian, populist, nationalist, and racist government taking control.

In today's Washington Post Charles Lane had a column focusing on Angela Merkel and Germany.  It is all about the irony that it has been this top performing economy (envied even by also good performing neighbor Poland), yet she has been unable to form a government, with a new far right wing anti-immigrant party entering parliament and blocking coalitions.  Title of column is "Actually, it's not (just) the economy, stupid."

He also, accurately in my view, says the problem is also in the US and other high income nations.  I shall post later about the US case, but, yes, the US has a Poland problem also.  I follow with two choice quotes from this column, noting that I am not usually all that impressed with Lane, but agree with him pretty much on this one.

"Germany's economy is the strongest in Europe and was even spared the worst of the 2008-2009 recession.  Yet a significant portion of its people, many more, apparently, than the traditional party system could absorb are angry just the same - about the influx of immigrants from the Middle East and Africa, about crime and violence, or about what Merkel called the "pace of contemporary life."  Now many are angry about the rise of the right.

Later in the column Lane actually quotes a famous line from Marx and Engels' Communist Manifesto:

"Everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones...All fixed, fast-frozen relations, with their train of ancient and venerable prejudices and opinions are swept away, all new-formed ones become antiquated before they can ossify.  All that is solid melts into air, all that is holy is profaned."

Addendum: 1/5/18: As it is, the good economic performance of Poland in 2009 is related to that of Germany at the same time, although Germany did actually go into recession, if not all that deep or long.  Poland had (and has) its own currency, the zloty, and a lot of what kept it having positive growth in 2009 was that it let thr value of the zloty fall, with it thus being able to export a lot to Germany.  But they have both ended up having the same problem, "ungrateful" citizens turning against governments that did better jobs of delivering the economic goods than their neighbors.

Barkley Rosser

Wednesday, January 3, 2018

Who said there is only a certain quantity of work to be done?

Support the Census

The alarm has been sounded that Trump’s census apparatchiks are planning to include a citizenship question in the short form that will be used to generate the full count in 2020.  This count, mandated by the constitution and conducted every ten years, is the basis for voting district apportionment and formulas for allocating government services.  Since the first census was taken in 1790 the government has enumerated all residents, citizens or not, and it hasn’t asked about legal status in decades.  It’s not difficult to foresee that such a question would lead to a substantial undercount of Hispanics, especially in the current climate of immigration hysteria.  That’s almost certainly the intent of the Trump plan, not an oversight.

Fortunately, there’s a way to fight this scheme through direct action: massive nonparticipation unless the question is withdrawn.  Refusing to take part in the census is theoretically illegal, but since millions of residents fail to return their form by mail, prosecution is a rare event.  The mail response rate for the 2010 census was about 76%, which means almost a quarter of the potential recipients didn’t make life easy for the Census Bureau.  For them to be counted, enumerators had to knock on their doors and complete the process in person.  These home visits are the biggest expense the Bureau faces to do its job.

Noncooperation could take one of two forms.  The least demanding would be a massive refusal to respond by mail.  If nonresponse could be increased by even just another 10-20% it could substantially increase the cost and decrease the reliability of the entire operation.  Or, if they could stick together, noncooperators could refuse altogether—although I suspect a few highly publicized prosecutions and giant fines would cause a break in the ranks.  (What would happen if crowds blocked enumerators’ access to houses the way eviction agents have been blocked during foreclosure protests?)

The rationale behind direct action would be simple: count us all or not at all.  There’s even an obvious name for a steering group to organize the action, Common Census.  Unless there was a plan to reimburse activists slapped with fines, it would take only a little funding to support the necessary publicity, and the demand that there be no question asking about citizenship is unambiguous.  I see no reason why “count us in or count me out” wouldn’t be a fight we could win.

Monday, January 1, 2018

Does Iran Have A "Poland Problem"?

Maybe somewhat, but not as much as Poland does, with a "Poland problem" being where a well performing economy does not prevent political unhappiness.  Iran is experiencing massive demonstrations that are heavily driven by economic complaints, even though economic performance has improved since the adoption and approval of the JCPOA nuclear deal.  Prior to that, in the face of economic sanctions, the Iranian economy was in recession, with GDP actually declining.  Unhappiness with this led to the election of moderate Rouhani as president, who negotiated the JCPOA, which led to the end of most, but not all (especially those by the US), of the economic sanctions.  As a result, oil exports have risen, and GDP has been growing at 4.5% recently, but it seems that few of the gains from this have "trickled down," with inflation now rising above 10%.  Aggravating the situation is perception of corruption by the ruling clerical elite, who control large portions of the economy through the bonyad religious foundations.  An irony is that many of those enterprises were once owned by cronies of the former Shah with his regime accused of corruption.

This is a very complicated situation, and I think we do not have full information about all that is going on.  However, while some of the protests have aimed at Rohani, increasingly some of it has been directed at the top leader, the Vali-e-faqi, or Supreme Jurisprudent, the unelected Ayatollah Ali Khameini, with reports of crowds chanting "Death to Khameini" and burning photos of his face.  It also should be noted that while not nearly as deadly as the Green Movement demonstrations against apparent electoral fraud in 2009, they seem much more widespread across many cities in Iran, while the 2009 events were largely in Tehran and a few other largest cities.

It is important to keep in mind how power is held and distributed in Iran as one sees all kinds of characterizations about it, including declarations that Iran is a "dictatorship."  It is not, but it is true that the unelected leader (Khameini) has more power than an elected one (Rouhani).  In particular, Khameini is the Commander-in-Chief of the military as well as being in charge of the judicial system based on Shia Sharia, as the proper translation of his official title as "Supreme Jurisprudent" indicates.  While he does not directly control them, it is the clerical hierarchy under him, along with parts of the military, that control the bonyads that constitute probably more than a quarter of the economy, which also has indicative planning and a substantial state-owned sector.  This latter part is more under the control of the elected president and his economics minister, as well as having more control over the Iranian central bank.

The "Poland problem" part involves those parts of the economy that can be influenced by Rouhani and his secular ministers and bureaucrats.  Somewhat like in Poland, he can be partly blamed for  not increasing redistribution or aid for the broader population.  The part he does not control is the massive corruption tied to the bonyads and the clerically controlled parts of the economy.  Long simmering unhappiness over this corruption appears to have finally exploded, although  Rouhani and his government are also being blamed.  I have no idea where this is going, but I fear that many more could end up dead than the two who have been killed so far reportedly.

I must make a comment about the incoherent response by President Trump.  It looked to be true that a target of the protests has been increasing funding going to the military for Iran's foreign adventures.  But Trump supports the same thing in the US, even though he ran against such a policy.  He is also moving to increase both inequality as well as "swampy" corruption, even though he also ran against those.

Of course the biggest problem from him has been his ongoing efforts to undo the JCPOA nuclear deal that led to what economic improvement Iran has experienced.  He has resisted removing remaining sanctions (in place against human rights violations and missile development), thus aggravating the Iran economic problems, and he clearly wants to simply end the JCPOA and reimpose harsher sanctions.  His proclaimed sympathy for protesting Iranian citizens looks hypocritical (along with the fact that he is blocking any Iranians wanting to escape to the US from doing so).

A final point many do not realize.  Those who want to end the JCPOA have also called for a regime change end of the theocratic regime, which could happen.  However, those pushing for this, many of whom thought the US should have given more active support to the failed Green Movement in 2009, do not realize that civilian nuclear power is very popular in Iran.  The Green Movement supported civilian nuclear power, even as they did not support it military nuclear program.  This was basically the position of Rouhani, who was not only elected on such a platform but reelected, even as Trump has ignored that and praised the truly dictatorial absolute monarchy of Saudi Arabia.  If indeed the theocracy of Khameini were to  be overthrown, Iran would almost certainly continue to pursue a civilian nuclear power program, if not a military one.

Barkley Rosser


Tuesday, December 26, 2017

Evergreen: So Much Stranger than That

I’m a professor at Evergreen State College, currently on leave.  Last year I lived through the events that were captured on videotape and brought the college a lot of unwanted publicity.  As a social scientist, long interested in organization theory and social movements, I found the experience grimly fascinating, an extraordinary case study.  In my writing on it, I try to focus on understanding how such things could occur, rather than apportioning blame to specific individuals, which, from what I can see, has been the main sport.

Today I read another post mortem by Bret Weinstein and Heather Heying, published in the right wing Washington Examiner.  Disclosure: I know both of them, and I had a positive experience co-teaching for a quarter with Heather several years ago in Evergreen’s environmental masters program.  I’m not socially connected to either of them, and I haven’t had political discussions with them either.  I agree with some of what they say in their latest missive, and disagree with other parts.  Readers of this blog, who are far from the scene and wonder who and what to believe, might find my reactions interesting.

There is an obvious, fundamental point on which the three of us see eye to eye: Evergreen descended into an atmosphere of intimidation, in which the right to speak, no matter how civilly, was openly attacked.  There was a group solidarity logic at work: if you affiliated with one group on campus, you could speak your mind in public and be immune from any scrutiny regarding the tone or logic of your utterances; if you didn’t you were expected to remain silent.  This pressure was felt by faculty and students alike.  It was in this context that disruptive actions by students escalated over many months until they paralyzed the college.  It’s remarkable that it even needs to be said that this situation is intolerable for an institution of higher education.

Personally, I think it is bizarre that Weinstein and Heying would be sent packing by the college under the same terms—the same monetary settlement—as Naima Lowe, whose verbal attacks on her colleagues caused enormous damage to Evergreen.  This is not a verdict of the “which side are you on” sort.  It’s not about whose political views you agree with or who you like or don’t like on a personal level.  Weinstein and Heying had a case against the college, and the college had a case against Lowe.  There wasn’t a shred of symmetry in this situation.

One critical aspect of the Evergreen imbroglio goes unmentioned in the Weinstein-Heying account, the barrage of terrifying, intimately threatening emails that bombarded students and faculty after Bret appeared on Fox News.  The wording in these emails reeked of racism and was often graphic, about specific acts of violence, and some students went into hiding because they couldn’t be sure the hatred was only verbal.  To be clear, I don’t blame Bret for that, at least in this sense: I’m pretty sure it never occurred to him that this would result from coverage by conservative media, and no doubt most of it would have taken place even if he had said “no” to Tucker Carlson.  Still, it’s an important part of the larger story, and if you offer an account of what happened you shouldn’t cherry-pick the parts that support your side.  Speaking for myself, I was appalled by this tsunami of hate, and I didn’t feel it was enough to say, this is just the alt-right being the alt-right.  We are all of us responsible for the predictable consequences of our actions, even if we aren’t the ones carrying them out.

But there is also an aspect of the Evergreen story, in many ways the most important one of all, that I think Weinstein-Heying got wrong.  The way they tell it, a left wing minority made a power play on campus in order to enact a radical, identity-fixated political program, the notorious Equity Plan.  This plan, they say, would have destroyed much of what made Evergreen a vital force in education, and the purpose of the intimidation was to push it through.  They cite one sentence from the plan document that calls for bringing diversity and equity criteria into decisions of what faculty specializations to hire in.  It is the Equity Plan that, in their account, makes the conflict political, a battle over which policies would be adopted by the college.

Now here’s the truly extraordinary thing which, in my view, completely upends the conventional understanding of the Evergreen affair: there was no Equity Plan.  Yes, there was a document, hyped in a truly bizarre manner during the November 2016 “canoe event”, called an Equity Plan.  It ran 38 pages, to a large extent a copy-and-paste job, in which rhetoric from a couple of nationally circulated diversity manuals was cobbled together to make it look like a plan existed or might come to exist at a later date.  To be blunt, there was a need for a document called an Equity Plan, so, in a few hours, something with this title was assembled, but there was no actionable plan for the college—no set of proposed regulations, no budgetary analysis, virtually nothing to endorse or oppose.  (This is a slight exaggeration: the “plan” called for mandatory diversity training, which is a staple of corporate America, and it created a new Vice Presidency for Equity and Inclusion, whose occupant would be tasked with figuring out what her job entailed.)

Moreover, there was no political platform behind the student protests.  Listen, for instance, to the student reading a statement at the disruption of the dedication of Purce Hall; it’s all about feelings of disrespect and fear, but there’s not a single word specifying what the college should do to assuage them.  The students who occupied the administrative wing of the library building in the spring issued (belatedly) a list of demands, but they were mostly either about personalities (a list of faculty and administrators to be fired) or too vague to be a subject for implementation.  At a college whose priorities are tightly constrained by its budget, there was no call for a reallocation of resources to meet the needs of underserved populations.  (This is a call I would have welcomed.)

The weird truth at the heart of what happened at Evergreen is that there was no political content to it.  It was all about group solidarities and symbolism.  If this can be given a left-right interpretation, it only means that politics in the wider society has been trained of all substance.  By continuing to portray the meltdown at the college as political, pinning it on (a portion of) the left, Weinstein-Heying are mischaracterizing it.  This in turn has the effect of reinforcing the tendency to take sides; no doubt many readers of their piece will see it as a defense of moderation in the face of radicalism.  Near the end, for instance, Weinstein-Heying write, “Both positions [left and right] have merit and, despite the frequent tenor of conversations between factions, they are not mutually exclusive. Wisdom is likely to emerge from the tension between these worldviews, uniting good people around the value of a fair system that fosters self-reliance as it distributes opportunity as broadly as possible.”  But the Evergreen meltdown was not about left versus right, institutional fairness versus personal responsibility.  Bret’s challenge, for which he was hounded out of the college, was not to the adoption of a political program that didn’t exist, but to the imposition of a coercive ritual symbolism.  You can be very radical in your politics and take that stand.  In fact, if you’re really interested in changing the world and not just how we talk about it, that’s exactly what you’ll do.

Saturday, December 23, 2017

The Poland Problem: How A Good Economy Does Not Guarantee A Good Politics

This is personal and professional.  My wife and I have the third edition of our comparative economics textbook now in press at MIT Press.  We have chapters on transition economies, and one is on  the Polish economy.  The standard story is that Poland has been the great success story of transition (now accepted to be over pretty much everywhere for awhile now).  It adopted largely western market capitalist institutions successfully, while avoiding mistakes made by other transition economies.  It avoided dismantling its social safety net.  It was careful about privatizing state-owned enterprises, and in fact continues to have a higher percentage of its output run by them compared to most other such economies, with this tied to its lower rate of corruption than many of them.  While it joined the EU, it avoided giving up its currency, which allowed it to devalue and preserve economic growth even as EU nations fell into recession.

Indeed, the ultimate economic success of Poland came during the Great Recession when it was the only nation that did not go into recession at all, steadily growing even through the pit of 2009.  It was the first Soviet bloc transition nation to come out of its transition recession, with a reasonably functioning parliamentary democracy, and it has outperformed all the rest economically.  In 2007, its president, Lech Kaczynski of the conservative Law and Justice Party, signed the Lisbon Treaty, which allows the EU to enforce judicial independence and other features of western democracy.  Later he would die in a plane crash in Russia, which led to his twin brother, the party's current leader to formulate conspiracy theories that Russia was behind the crash.  A souring of attitudes came over the party as it went into a period out of power.  But Poland would become one of the most respected members of the EU, with a former president, Donald Tusk, now an EU leader.

On returning to power the Law and Justice party has followed a new track, obsessed by conspiracy theories, it has turned against Russians, Muslims, and Jews, but loves Donald Trump as well as the also neo-authoritarian regime of Victor Orban in Hungary (who is pro-Russia in contrast with the Poles).  Both now thumb their noses at the EU and its rules.  The latest for Poland is a new law that allows the government to remove half the judges and otherwise take firm control of the judicial system in a way violating Section 7 of the Lisbon Treaty.  The EU has formally condemned this move under the treaty, with tis setting up a possible loss of voting rights in the EU for Poland.  But the government seems not to care and is more committed to pursuing its nationalistic and authoritarian policies.

An irony of the current situation is that one of the politicians driving the changes. Stanislaw Piotrowicz, was a prosecutor during the period of Communist rule prior to 1989 who helped put dissidents in jail.  The irony here is the extreme anti-communism of the Law and Justice party.

What is mysterious is that there is not some obvious economic crisis or problem that is driving this "populist" political trend.  Again, economic inequality is not high and corruption is low.  The unemployment rate could be lower, but the economy has seen much growth reasonably well distributed, and it is broadly stable without inflation or major control by foreigners, even the hated German neighbors.

That said, one subtle issue of economics may be playing into this, even if it still seems to be secondary.  Moving out of the Soviet bloc into the EU has changed the frame of reference.  Whereas preciously the Poles could see themselves as better off economically than the politically dominating Soviets.  Now they compare themselves to higher income Germany, France, and the UK.  Indeed, an irony of the UK Brexit movement is that a motivating element in it has been anger over immigrant "Polish plumbers" supposedly undercutting good local Brits in the job market. The Poles are going elsewhere than Poland to better themselves economically, and this may well provide a backdrop that supports the current dark political trend.

Barkley Rosser

Friday, December 22, 2017

Catalonia Imitates US Dysfunctional Election

With 98% of the vote counted, reportedly (WaPo today) 52% of the vote in Catalonia has gone for pro-union (with Spain) parties, while 48% has gone for pro-secession parties.  However, apparently the pro-secession parties have won a solid majority in the parliament.  This looks to me like last year's US presidential election, where Trump was elected while losing the popular vote.

I do not know what will happen there, nor do I have some nice neat recommendation for what they should do.  Obviously the province is deeply and sharply and closely split over the secession issue.  This election will not resolve it.  Presumably the new government will push more for independence, but the central government, along with pretty much all of the EU and most of the rest of the world pushing back.

I am on record already expressing my own lack of sympathy for this movement.  They gain credibility when the central government arrests their leaders and sends in police to beat and arrest demonstraters.  But they already have language and educational autonomy.  The main thing they seem to want is not to have their tax monies going to poorer regions of Spain.  In this they resemblr the neo-fascist separatist parties of northern Italy, even as they invoke ant-fascism for their movement based on former Spanish history.  I am not impressed.

I find all this to be sad as I like Catalonia and especially Barcelona.  I worry that like so many other places that were doing well and now are not due to internal conflicts, this could happen there also.

Barkley Rosser

Thursday, December 21, 2017

Black Mirror Big Data Becomes Big Brother In China

And maybe coming soon to the US as well, enough to make Orwell sit up and take notice.

The first show of the 2016 season of the sci fi TV show, "Black Mirror," called "Nosedive," showed a future society where people have overall social scores (1-5) that are constantly being changed based on what they do and who they interact with and how.  Access to many things is based on one's rating.  The female lead has a middling score and wants to raise it by attending wedding of friend with higher rating,  Her efforts to do so lead her to do things that make her rating fall, which then leads it to nosedive as others downrate her and dump her,with her ending up in prison.  While not quite that far gone, a system like this seems to be emerging in China, including the phenomenon of people dumping others whose social rating is falling, thus putting them into such a nosedive.  However, the scores are 350-950, resembling FICO financial ratings used initially by mortgage lenders in the US.

The emerging system is described in a recent Wired article by Mara Hvistendahl (probably Norwegian or Danish) who is currently living in China and has a low rating she has been trying to raise as she is shut out of buying various things due to it,  I suspect part of her low rating is because she is a foreigner, which she never mentions as a possible reason, but her description of how the system works and is being developed jointly by the Chinese government in conjunction with Alibaba through its Alipay system, particularly its Zhima "credit scoring system."  It was initially a commercial system based on what people buy, but using big data goes much further to rate more broadly how people behave and with whom.  Thus a journalist who reported on corruption now has a low rating and cannot do many things.  Tyler Cowen has a link to this in his assorted links for Tuesday the 19th on Marginal Revolution, but I am having trouble linking either to either,

Curiously in yesterday's "China Watch," a pro-Chinese government monthly newspaper that comes with the Washington Post, bragged about parts of this system in two articles.  One entitled "Alibaba credit scorer looks past deposits" reports on how its advanced "risk control" system is bringing in insurance companies  to help businesses avoid not getting paid.  The other, "Recruiters Switch On To Social Media," reports how businesses search for possible employees by looking at their social networks on social media..  The benefits to those who might gain are stressed, but no possible downsides or criticism are mentioned.

Hvistendahl points out that much of this already going on in the US, with all of us being rated constantly by far more entities than we are aware of on grounds we shall never discover. What is missing here so far is a government drive to centralize it and exploit it for broader purposes of political and social control at least for now.

The article concludes with how the system in China is increasingly shifting to using facial recognition systems in all this, with one person she spoke with having experienced false facial recognition.  As it is, the Washington Post itself had a story on Wednesday on the main guy in China developing the system.  There was no mention of failures in it, although there was a brief mention of how privacy activists are concerned about with the spread of ubiquitous public surveillance cameras, something happening in the US as well, if a bit more slowly.

Indeed, George Orwell would be proud.

Barkley Rosser

Tuesday, December 19, 2017

The Missing Piece in Plans for an All-Electric Vehicle Fleet: Electricity

The New York Times has a piece today on barriers to the replacement of internal combustion-powered vehicles to an all-electric fleet in the United States.  It talks about production costs, the availability of key minerals and the need for a charging station infrastructure, but it oddly passes over the most obvious impediment, at least from the perspective of climate change, the large increase it would require in electrical generating capacity.

If the goal is, at it should be, rapid decarbonization of the economy, conversion to electric powertrains is worth doing only if it results in the replacement of petroleum by renewable energy sources, so lets look at the arithmetic.

According to the latest version of Lawrence Livermore’s invaluable energy spaghetti diagram, 25.7 quads of energy, in the form of petroleum, were used as inputs to the transportation sector.  (A quad is a quadrillion BTUs, approximately the amount of energy in eight billions gallons of gasoline.)  Electric vehicles vary in their efficiency, and there might be improvements on this front in the future, but lets use the common assumption that EV’s are four times as energy efficient as ICV’s; that means we are looking at about 6.4 quads of added electrical demand.

Electricity output in 2016 was 12.6 quads, which implies we would need a bit over 50% more capacity to accommodate an all-electric fleet.  Of course, the actual expansion would be less than this because EV’s could take advantage of off-peak capacity.  Nevertheless, from a decarbonization perspective, the critical constraint is not capacity as such but energy inputs as fuel.  A natural gas plant might be able to put out more electricity over a 24-hour cycle without additional capital investment, but only by burning more gas.  Those with greater expertise than I can summon can tell us how much efficiency we can squeeze from existing and prospective electrical generating technology.

So somewhat more than 50% additional electricity is needed; how much of this can come from non-carbon sources?  The most optimistic scenario is one in which nuclear energy is included in this (non-carbon) mix, so assume the goal is simply to zero out coal and gas.  These two sources currently account for 62% of inputs into the electrical generating sector.  No doubt we can get significant reductions simply through efficiency measures; think of all those electrically-heated buildings leaking energy through poor insulation.  If for convenience we lump together increases in non-carbon inputs and efficiency savings, this would need to total 23.3 quads, the current delivery of coal and gas to US electrical power stations, if the services provided by electricity use were to remain constant.  If a shift to EV’s boosts electrical demand by, say, 40%, the need for renewable sources and efficiency savings would go up to 38.3 quads (23.3 current carbon input plus 15 new input), an increase of almost two-thirds.  It is difficult see how this could be achieved in the space of a generation or so, which is the timescale we face if we are to meet our declared carbon goals.

The bottom line as I see it is that, while a shift to electrical powertrains is necessary if we are to have motorized vehicles in a post-carbon world, realistic scenarios for the electrical sector require a massive shrinkage of the number of such vehicles we’ll be able to operate, at least for the foreseeable future.  This is unfortunate on two counts—it will make it more difficult to sustain living standards across the transition ahead of us, and it will increase the political barriers to getting the job done—but we won’t make it go away by not seeing it for what it is.