Monthly Archive for March, 2008

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Bush the Multilateralist

Published on 3/29/2008 in Foreign Policy . Closed

…with Mr. Bush’s days in office nearing an end, it’s worth blowing apart the myth of the “go it alone” Presidency. The truth is that, with a couple of exceptions, he’s been the model of a modern multilateralist.

…All of this goes unnoticed by the news media, which long ago settled on their “unilateral” stereotype and which has now become a Democratic talking point. Here’s a prediction: Despite their campaign talk about cooperating with the world, two years into a McCain, Obama or Clinton Presidency our relations with Europe and the Middle East won’t be much different than they are today. These disputes have far more to do with underlying differences in national interest and values than they do with the myth of Mr. Bush’s unilateral diplomacy.

A useful bit of true history, fairly accurate according to what my research has turned up. More to follow…

Cato compares global health care solutions

Published on 3/29/2008 in Healthcare . Closed

Critics of the U.S. health care system frequently point to other countries as models for reform. They point out that many countries spend far less on health care than the United States yet seem to enjoy better health outcomes. The United States should follow the lead of those countries, the critics say, and adopt a government- run, national health care system.

However, a closer look shows that nearly all health care systems worldwide are wrestling with problems of rising costs and lack of access to care. There is no single international model for national health care, of course. Countries vary dramatically in the degree of central control, regulation, and cost sharing they impose, and in the role of private insurance. Still, overall trends from national health care systems around the world suggest the following…

A recent Cato podcast discussed this new study very briefly. I’ve just downloaded the PDF, but not yet digested. An intriguing point made in the podcast is that Switzerland has a highly regarded system which is based entirely upon private insurance. And Switzerland spends about 2/3 of the U.S. level of 17% of GDP.

Iraqi documents: listen to what Hamas says

Published on 3/29/2008 in Counter Terrorism and Israel . Closed Tags: , .

Last week The Australian gave extensive coverage to some of the thousands of newly translated documents from the Iraqi government under Saddam Hussein, which indicated a promiscuous and intense relationship between Saddam’s government and international terrorism.

Saddam was a great backer of Palestinian terrorism, including Hamas. The documents show that after the 9/11 attacks a Palestinian leader, presumably a Hamas leader, told the Iraqis that Hamas had 35 armed terror cells across the world, mingled with refugee populations, including in France, Sweden and Denmark.

…Other documents detail the Iraqis learning of the depth of Iranian involvement in Hamas. A report from August 1, 1998, reads: “An agent supplied us with information about a pact between (Hamas leader) Sheik Ahmad Yasin and the Iranian leadership. The most significant information was Iran’s support for the Hamas movement and the appropriating of $15 million a month, as well as supplying Hamas with commando teams to carry out operations abroad, and forming a new organisation named Hezbollah-Palestine to divert suspicion away from Hamas in case it carries out sensitive operations and assassinations.”

…As this column has previously assessed, Israel will eventually have to respond. I believe there will be a big Israeli campaign and this will convulse the Middle East. Because to really remove the rocket threat, Israel will have to take back control of the Gaza-Egypt border, establish military intelligence and response posts at least in some parts of Gaza, and possibly occupy some of what have been the rocket launch points in northern Gaza.

More from Greg Sheridan

An omnibus of good energy policy links…

Published on 3/28/2008 in Energy Policy . Closed

at the WSJ Energy Blog. Sugars into “biogasoline, geothermal, carbon taxes — enjoy.

Shai Agassi: Denmark joins Israel in ambitious EV project

Published on 3/28/2008 in Energy Policy and Technology . 1 Comment

Let me make a bold prediction – Israel will not be alone on the road to electric transportation. By the end of this year there will be at least 5 countries supporting the same policies and on the same framework. As to the car industry – In the words of Lee Iaccoca – It is time to lead, follow or get out of the way.

I first wrote back in January about the revolutionary all-electric-vehicle project in Israel. At that time I had only found press release material. Since then I’ve found more background at founder Shai Agassi’s blog. Here he describes the rollout of the Project Better Place venture with Israel and Renault. And an English translation of his announcement speech is here.

Today I learned that one of those 5 countries is Denmark, which will have the added cachet of wind power as the nominal source of the electrons. Plus a sufficient quantity of such Denmark EV’s could realize my personal dream of using the EV batteries as distributed storage for excess wind or solar power. Denmark generates about 20% of their electricity from wind, averaging significant excess above grid requirements. That excess is sold to neighbors at a big discount. With the EV storage scheme in place, that excess power could be sold back into the grid.

Here’s an excerpt from The Register on the new Denmark project:

…Agassi said that the Israeli and Danish projects were broadly similar in size and timescale. Both will see the first vehicles on the road next year, with production ramping up into thousands in 2010, by which time the fueling infrastructure will be starting to emerge.

Also like Israel, the Danish government will be offering tax breaks on the vehicles. According to Agassi, the average price of a car in Denmark is $60,000 (about €38,000), while the tax break could price an electric car as low as $20,000 there. So the Project Better Place formula for success so far seems to be to get the attention of a power company to provide the network, and secure the tax breaks that will make electric vehicles a compelling proposition compared to petrol. This may not play so well in countries that don’t already tax motor vehicles heavily, and/or that have a substantial auto manufacturing industry.

The Denmark infrastructure will consist of approximately 500,000 charging spots and 150 battery swap stations, allowing vehicles to be charged overnight, and the swap stations to be used as a gas station equivalent for longer journeys. Agassi sees it as vital that using an electric vehicle is at least as convenient as using a petrol driven one, so the battery swap should take no longer than it would to fill a tank of petrol – but he claims 20 seconds is do-able.

Drivers won’t own the batteries, and will pay based on miles driven rather directly for electricity used, so the age of the battery installed shouldn’t be a major issue so long as it’s good for the specified mileage, nor will drivers lose money by trading in batteries before they’re fully run down.

Agassi’s startup raised $200 million in venture capital last year. That was all equity, which could leverage a billion or so of the infrastructure investment required to emplace all the charging stations, battery installation & replacement, etc.

If this doesn’t generate some real excitement in the EV space I’ll be astonished. I sure hope this is one of the 10% of VC deals that becomes a big winner.

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What to do

Published on 3/28/2008 in Economics . Closed

This looks right to me — by Tyler Cowen:

1. As long as the Fed and Treasury are providing a safety net, insisting on capital requirements is entirely reasonable and it lowers moral hazard.  If you’re going to bail out your friend in a poker game, you can ask him not to bet too much beyond his chips.

2. When the “shadow banking system” does not have capital requirements, normal financial activities, as regulated by the Fed, are inefficiently taxed and too much of an economy’s leverage ends up in the unregulated shadow banking sector. 

3. If you are anti-regulation on this issue, make the capital requirement relatively low but still impose it symmetrically across financial sectors.

4. Ideally capital requirements should be adjusted for risk.  That probably implies higher capital requirements for shadow banking activity, not lower requirements.

5. Regulatory issues aside, market participants are less sure of themselves in the shadow banking sector.  Derivatives are non-transparent, for a start.  That’s another reason not to push too much financial activity into the shadow banking sector.

6. A final solution to excess risk-taking and leverage has to come from shareholders; regulation can only do so much and of course capital requirements are only a small part of regulation.  But in the meantime I think the case for more symmetric capital requirements is a strong one, recognizing all the usual comments about horses and barn doors, etc.

Beyond the Noise on Free Trade

Published on 3/28/2008 in Economics . Closed

An excellent short essay by one of my favorite economists, Greg Mankiw, on the worrying anti-trade rhetoric of Clinton and Obama. Greg closes with:

…It is hard to be confident, however, that on issues of trade policy either Democratic candidate would act like the last Democratic president. Maybe the candidates’ records as legislators are not good indicators of what their policies might be as president. Maybe campaign rhetoric about Nafta is nothing more than that. But counting on it requires, one might say, the audacity of hope.

That is, to voters who understand economics the democratic candidates are saying “Vote for me, because I will do the exact opposite of what I am promising” — in my campaign to win over the union vote. Fortunately John McCain has an impeccable record of supporting free trade, while opposing subsidies and tariffs.

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Hold the Hysteria

Published on 3/27/2008 in Economics . Closed

Greg Mankiw linked to this little essay by Robert Samuelson. My take is much the same as Samuelson’s — I presume the same for Mankiw since he linked without comment. Bottom line: if instead of reading the NY Times you just look around and consider how you and your mates are doing — the sky really is not falling.

WASHINGTON — Regarding the economy, it’s hard not to notice this stark contrast: The “real economy” of spending, production and jobs — though weakening — is hardly in a state of collapse; but much of today’s semi-hysterical commentary suggests that it is. Financial markets for stocks and bonds are described as being “in turmoil.” People talk about a recession as if it were the second coming of Genghis Khan. Some whisper the dreaded word “depression.” Meanwhile, Americans are expected to buy about 15 million vehicles in 2008; though down from 16.5 million in 2006, that’s still a lot.

There’s a disconnect between what people see around them and what they’re told is happening. The first is upsetting (rising gas prices, falling home prices, fewer jobs) but reflects the normal reverses of a $14 trillion economy. The second (“panic,” “financial meltdown”) suggests the onset of something catastrophic and totally outside the experience of ordinary people. The economy, said The New York Times last week, may be on “the brink of the worst recession in a generation” — an ominous warning.

Both adaption and mitigation — not either or

Published on 3/27/2008 in Climate Change , Climate Science and Energy Policy . Closed

This morning I found this LA Times article Global warming: Just deal with it, some scientists say. Reading on I noted the author, Alan Zarembo, misquoted Seekerblog reliable source Roger Pielke, Jr. It was obvious that Zarembo failed to understand his subject. The piece read as though he was cutting and pasting quotes from sources he found — supposedly “balancing” the views of two camps: the pro-mitigation vs. the pro-adaptation camp. To fit his framing, Dr. Pielke was pitched into the pro-adaptation camp, which Zarembo cast in the typical media “horse race” metaphor as therefore being against the other camp. I.e., if you favor more emphasis on adaption then it follows you are anti-mitigation. Wrong.

Since I have read Dr. Pielke’s work for the past eight or so years I knew that was a complete misrepresentation. So I checked Roger’s site, finding a March 26 post providing cogent explanation of what are the real issues. An excerpt:

The reality is that whatever the world decides to do on mitigation, we will have no choice but to improve our adaptation to climate. Humans have been improving their adaptation to climate forever and will continue to do so. Since we are going to adapt, we should do it wisely. And this means rejecting bad policy arguments when offered in the way of substitutes for adaptation, like the tired old view that today’s disaster losses are somehow a justification for changes to energy policies. Misleading policy arguments and should be pointed out as such, because they hurt both the cause of adaptation, but ironically the cause of mitigation as well.

If mitigation advocates do not like being told that their misleading arguments poorly serve policy debate, well, they should probably try to come up with a more robust set of arguments. Arguing that support for adaptation undercuts support for mitigation is a little like making the argument that support for eating healthy and getting exercise (adapting one’s lifestyle) undercuts support for heart surgery research (mitigating the effects of heart disease). Obviously we should seek both adaptation and mitigation in the context of heart disease.

If the case for action on energy policy is so overwhelmingly strong (and again, I think that it is), then there should be no reason to resort to misleading arguments completely detached from the conclusions of a wide range of analyses. Misleading arguments may be politically expedient in the short term, but cannot help the mitigation cause in the long run. And dealing with the emissions of greenhouse gases will take place over the long run. Meantime, we’ll adapt.

Don’t miss Roger’s complete post — it would be hard to find a more concise summary of why adaption AND mitigation is sound policy.

The death and life of the American newspaper

Published on 3/27/2008 in Media . Closed

In the latest New Yorker Eric Alterman examines the history and future of the “dead tree publications”.

According to “Abandoning the News,” published by the Carnegie Corporation, thirty-nine per cent of respondents under the age of thirty-five told researchers that they expected to use the Internet in the future for news purposes; just eight per cent said that they would rely on a newspaper. It is a point of ironic injustice, perhaps, that when a reader surfs the Web in search of political news he frequently ends up at a site that is merely aggregating journalistic work that originated in a newspaper, but that fact is not likely to save any newspaper jobs or increase papers’ stock valuation.

Thanks to “Bob Cringely” for the link. In his post Bob describes the sort of smart RSS feed he wants — as do we.

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