Archive for December, 2010|Monthly archive page
I just posted a YouTube video discussing the Invisible Handcuffs, which comes out in two days on January 1.
I am commenting on a subject despite my limited knowledge. Any comments or suggestions would be appreciated.
Robert Guttmann and Dominique Plihon have put together an extraordinarily comprehensive analysis of Europe’s single-currency project. Even if I had some expertise in the subject, I suspect that I would not have many criticisms. Instead, I would like to raise a few of questions because the paper whetted my appetite for more information.
First of all, the paper tells us about the project from the perspective of the people who were in power to make the decisions that led up to the final arrangement. According to Thomas Sargent:
“The people who set up the euro clearly … strove to set things up to protect the euro from any adverse consequences … Indeed, the whole system was designed to force governments to balance their budgets in a present value sense, adjusting appropriately for growth. Indeed, the Maastricht Treaty actually put in fiscal rules that amounted to overkill in the interests of creating a fail-safe system.”
The casualties of that overkill are now obvious, but I would have liked to learn more about voices raised against this project from the perspective of class interests.
Sargent went further, proposing that “The euro is basically an artificial gold standard. The fiscal rules in the Maastricht Treaty were designed to make explicit the present-value budget balance that was unspoken under the gold standard.”
Rais Dana was jailed so that the prices can be liberated.
After months of struggle between the government and the Majles (parliament), the so-called plan for “targeted subsidies” has been implemented. Although contrary to what is claimed, the plan did not originate with the “creative minds” of the economic team of the present government and goes back to the previous administrations, ever sincecoming to power, the administration of Mahmoud Ahmadinejad has been determined to implement the neoliberal economic plan using whatever means necessary, including military forces and the armed militia.
Only hours after the start of the plan’s implementation, Dr. Fariborz Rais Dana, the leftist economist and strong critic of such neoliberal economic plans was arrested by the security forces. Although the arrest of the critics is nothing new, and many others have previously been arrested and repressed, we, a group of leftist activists in Iran, view the arrest of Dr. Raeis Dana not as a confrontation between an individual and the government, but between a progressive group of which Rais Dana is a representative, and the government.
Molière’s 1670 his play, The Bourgeois Gentleman, presented before the court of Louis XIV, mocked a foolish, social‑climbing merchant. In his effort to remake himself, the merchant takes lessons to help him pass as an aristocrat. In a basic lesson on language, he is both surprised and delighted to learn he had been speaking prose all his life without knowing it. Almost three and a half centuries later, much of the world finds itself speaking a different language ‑‑ economics ‑‑ also without full awareness.
“… Which is odd when you think about it. If you are looking for an American institution that failed the public, made resources disappear without returning value and lacked accountability for its manifest sins, the Education Department would be in line well behind Wall Street. By now, the notion that business is a place built on accountability and performance should be as outdated as the one-room schoolhouse. Ask yourself, what would happen if American public schools were offered hundreds of billions in bailout money? One outcome is not in the cards: its leaders would not end up back at the trough so quickly, sucking up tens of millions in bonuses as Wall Street has.”
Now that the US is tightening the financial noose around Assange, the New York Times has an editorial calling for the replacement of cash with electronic money. Kurke, Leslie. 1999. Coins, Bodies, Games, and Gold: The Politics of Meaning in Archaic Greece (Princeton: Princeton University Press) describes how Herodotus saw money as a way to undermine hierarchies. Finally, the military agrees.
Lipow, Jonathan. 2010. “Turn In Your Bin Ladens.” New York Times (18 December): p. A 23.
“Nowadays, terrorist networks have become important users of cash. No organization understands this better than the United States military. During the early years of coalition operations in Afghanistan and Iraq, American forces distributed cash liberally. From 2003 and 2008, about $19 billion in physical money was handed out to Iraqi suppliers and contractors.”
“But the military has gradually realized that the anonymity of cash makes it easy for terrorists and insurgents to smuggle in money and make purchases without a trace. That’s why for the past few years the military has been striving to replace its cash transactions with electronic fund transfers and debit card payments in the hopes of achieving a “cashless battlefield,” in the words of Peter Kunkel, a former assistant secretary of the Army.”
Soon the government will be able to tell when a 7 year old buys some bubble gum.
I am going to give a talk to a Chinese delegation. I have to write up the talk in advance for the participants to have a translation to read.
Any comments would be appreciated.
A short time ago, I posted the report about the low salaries earned by Chinese graduates. Here is an article from the New York Times suggesting the intensive training of Chinese students.
Dillon, Sam. 2010. “Top Test Scores From Shanghai Stun Educators.” Nerw York Times (7 December): p. A 1.
“With China’s debut in international standardized testing, students in Shanghai have surprised experts by outscoring their counterparts in dozens of other countries, in reading as well as in math and science, according to the results of a respected exam. American officials and Europeans involved in administering the test in about 65 countries acknowledged that the scores from Shanghai — an industrial powerhouse with some 20 million residents and scores of modern universities that is a magnet for the best students in the country — are by no means representative of all of China.”
“About 5,100 15-year-olds in Shanghai were chosen as a representative cross-section of students in that city. In the United States, a similar number of students from across the country were selected as a representative sample for the test. Experts noted the obvious difficulty of using a standardized test to compare countries and cities of vastly different sizes. Even so, they said the stellar academic performance of students in Shanghai was noteworthy, and another sign of China’s rapid modernization.” Read more »
I am saddened by the employment prospects for my students, but the problems for Chinese students seem even more severe. I met no university students who expected any desirable jobs. Here is an article that suggests that my own observation of Chinese students was too rosy.
“China’s college graduates on average make only 300 yuan, or roughly $44, more per month than the average Chinese migrant worker, according to statistics cited over the weekend by a top Chinese labor researcher and reported today by the Beijing Times.”
“”It’s the first time China has faced such a situation,” the paper quoted Cai Fang, head of the Chinese Academy of Social Science’s Institute of Population and Labor Economics, as saying Saturday at a conference on Chinese youth. “It’s hard to say how long this situation will last.” By Mr. Cai’s calculations, college graduates have consistently earned around 1,500 yuan a month since 2003. Migrant workers, meanwhile, have seen their monthly wages rise from an average of 700 yuan to 1,200 yuan over roughly the same time period, Mr. Cai said, according to the Beijing Times.”
Chin, Josh. 2010. “Value of a Chinese College Degree: $44?” Wall Street Journal China Realtime Report (22 November).
Inadvertent Insights from the Wall Street Journal
The Wall Street Journal reports: “The House approved legislation Thursday that would extend current tax rates on income up to $250,000 while allowing taxes on higher earnings to rise, a largely symbolic vote that pointed to divisions among Democrats in the waning days of their dominance on Capitol Hill. The bill passed 234-188, but 20 Democrats opposed it — mostly lawmakers who lost on Election Day and who agree with Republicans that it is bad policy to let any tax rates rise amid a fragile economy.”
Hook, Janet 2010. “Tax-Cut Vote Shows Democratic Divide: House Passes Extension Excluding Higher Incomes, a Largely Symbolic Effort Reflecting Unhappiness With White House.” Wall Street Journal (3 December): p. A 5
Are we to believe that giving tax breaks to the super-rich will do wonders for the economy or that the people are clamoring to give aid to those worthies.
What about this Democratic divide? That only a few right-wing Democrats remain in the House; that the remaining Democrats generally oppose Obama and yet get elected. Their vote was largely symbolic because most of them know that Obama will cave and they can get credit for supporting the little guys who make less than a quarter million dollars a year. Then they can go about cutting benefits for the real little guys.
Question of the day: What is the most courageous decision that any politician today has been willing to take?