Daniel

Joe Stiglitz, interviewed in the Guardian about his book (co-authored with Linda Bilmes), “The Three Trillion Dollar War”. A couple of thoughts:

• The cost of the Iraq War could have underwritten Social Security for fifty years. This brings home one of the points Max Sawicky always made in the SS debate (in general to a brick wall). Although the headline amounts associated with these problems are scary, they are actually not all that much as a percentage of GDP. The Iraq War is a horrific waste of money, but I don’t think anyone would actually try and claim that it literally can’t be afforded. Similarly with the Medicare/Medicaid/Social Security nexus of funding costs; it’s absolutely clear that the productive capacity of the US economy can pay for these things, it’s just a question of whether there is political will to do so, or whether the government would rather spend the money on killing hundreds of thousands of people overseas for no very obvious benefit.
  


• It’s not often that one gets to correct a Nobel Prize winner, so I will take the opportunity. Stiglitz is qutoed as saying that “Money spent on armaments is money poured down the drain”. This is actually the best case for armaments spending from an economic point of view. Most of the time, when armaments are used, they damage something valuable. If all the bullets fired in Iraq had been poured down the drain instead, the world economy would be massively better off, even allowing for the cost of cleaning up the pollution caused in the drain.
  


• Three trillion dollars really could have solved a lot of world problems. For example, it would have funded a once-and-for-all offer to the entire population of Gaza, the West Bank and the UNRWA refugee camps of half a million dollars each to slope off and stop bothering the Israelis. That’s the sort of money we’re talking about here.

More from Dan Hardie on the subject of Iraqi employees of British forces; specifically on those ex-employees who are currently stuck in Iraq and neighbouring countries, waiting for the Borders & Immigration Agency to process their applications. Absolutely scandalous. Once more, the Parliamentary switchboard is 0207 219 3000 and it is really not difficult to put a (polite) call in to your MP on the general theme that the Foreign Secretary and Prime Minister have made a public commitment to helping the employees, and delaying the asylum and resettlement applications for these people is as bad as abandoning them.

Dan writes, below the fold:
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I have a post up at the Guardian blog on the general subject of it not being terribly practical to assume that if we all shout hard enough at the Chinese government, they will wave their Chinese magic wand and the Darfur crisis will go away. In the post, I unaccountably forgot to link to Alex Harrowell at Fistful of Euros, who inspired the post by reminding me that I held this view. I’m now correcting this (frankly the CT referral stream is probably a little less, shall we say, problematic[1] than the Comment is Free one). So let the circle-jerk be unbroken, etc. Sorry Alex.

In general, though, and I didn’t explore this enough because it would have looked like rambling, a lot of people seem to think that the Olympic Games is the most important thing in the world to China. How much do we think they really care about it going well? I mean, seriously, we are going to be hosting this thing in London soon, and if it really is true that major world governments regularly make massive shifts of geopolitical influence in order to avoid a few slightly embarrassing scenes at their opening ceremony, then I am rather worried about what the rest of the world might have planned for us.

[1] No, let’s say “insane”

The UK is all agog at the moment over the bugging of an MP’s conversations with one of his constituents, while the constituent was being held by police on (apparently credible) suspicion of terrorist offences. There seems to be quite a debate going back and forth about whether the “Wilson Doctrine” (basically forbidding the tapping of MPs’ telephones and commonly thought to also rule out bugging them in more modern ways) has any place in the new world order. I think this is a very easy question to answer, along game-theoretic lines not a million miles from those suggested by John in a post on the general subject of bugging and spying a couple of years ago. All one has to do is to remember the following fairly basic general principle, which would hardly make it onto the syllabus at most decent business schools because it’s so obvious:

If you create the presumption that the cops can hear anything that you tell an MP, then people will only tell their MP things that they would be happy to tell a cop

I would guess that there are plenty of people in the Muslim community in Tooting who would tell Sadiq Khan MP things that they would not tell the police. I would further surmise that the general security of the British public (ie me) is benefited to some small extent from the fact that there are people in the Muslim community in Tooting who would tell Sadiq Khan MP things that they would not tell the police. I rather suspect that the bod who decided to bug Sadiq Khan’s conversation with Babar Ahmad was concentrating purely on his own case and did not consider the more general ramifications of undermining the general principle that MPs conversations are not directly accessible to the police.

note: I originally wrote this for the Dani Rodrik seminar. As it grew, though, it became apparent that it didn’t really have much to do with “One Economics, Many Recipes” and that it was thus a bit unfair to ask Dani to comment on it. On the other hand, I liked it too much to kill it altogether – dd

“One Economics, Many Recipes” makes a lot of useful and constructive suggestions about how to attack the central problems of economic development. However I don’t think it gives enough emphasis (fundamentally because I don’t think it’s possible to give enough emphasis) to international debt as a constraint on development. Nearly all of the success stories in the book relate to countries which started their periods of development without a large debt burden, and the presence or absence of large net external debt is certainly one characteristic which matches up well to the motivating stylised fact in the book – the distinction between those countries like Argentina which followed all the standard policy recommendations but didn’t develop and those like China which ignored them and did. In this essay, I’ll try and flesh out a few provocative views on the financial aspects of development policy, which in my view are just as important real-world constraints as the institutional real-economy factors that are the main subject matter of the book.

Actually, just as I don’t think it’s sensible to carry out international comparisons of crime rates without taking demographics and urbanisation into account, I don’t think that any kind of comparative analysis of developing economies can be carried out at all without conditioning on the debt burden. It’s that important. When you have a situation in which a country’s capital account is dominated by contractual flows payable in foreign exchange, that is far and away the most important fact about that country’s economy. This is because as long as the debt service constraint is binding (and I discuss what happens when it isn’t, below), then unless the country is receiving massive net transfers from abroad, the entire economic development program is going to end up being twisted toward a capital account constraint which almost certainly has nothing to do with a sensible locally-based development plan of the kind that Dani advocates.
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Apparently I am on “mea culpa watch” from Tyler Cowen, Picture me at present pursing my lips and flapping my wrist in the international signal for “ooh! Get her!”. I have looked at the NEJM study, had a look at some of the online discussion of it, and I think that few of my friends and few of my enemies will be disappointed to learn that my response is not so much “mea culpa” as “pogue mahone”. In particular, see below the fold for a list of apologies not forthcoming, additional castigation, and new heretics who need to be squelched.
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I have a minor annual tradition (as in, I did it once) of beginning the year with a short list of arguments that I am no longer going to have. As I said when I produced the first such list, while not necessarily claiming to have the definitive truth on these subjects, my views

“Are no longer up for argument, pending absolutely spectacular new evidence. I’ve had a number of arguments on all of these points over the last year; I’ve heard all sides, and I’ve made up my mind. If anyone has an argument which they genuinely believe to be new, go ahead, but don’t expect much. Please note also that I am no longer interested in methodological debates over the merits of statistical studies which purport to prove the matter one way or another on any of these propositions.”

It’s basically a way of clearing the decks of old pointless arguments, leaving room for new pointless and bitter arguments (I hope to post next week a short list of things that I plan to argue about a heck of a lot more, being a list of tacit assumptions made by other people that I regard as highly questionable). If you want to have a last go on any of the short list below, now’s the time, but otherwise it is books closed, I’m afraid; I have made a reasonable donation to the Grice United Fund which ought to cover any genuinely deserving intellectual charity cases. So here’s the list – it’s actually shorter than previous years.
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On the front page of the Times today, it appears that the UK is attempting to wriggle out of its commitments to Iraqi employees of the British Army, even as we’re preparing to leave Basra. Part of me wants to believe that this is a matter of bureaucratic callousness rather than anything else, but as Brad DeLong says, the Cossacks work for the Czar – if people in David Milliband’s department are trying to wriggle out of a commitment that David Milliband made, then they’re doing it because he told them to, or because he doesn’t care whether they do it or not.

The last time we had a discussion of this on Crooked Timber, it turned pretty ugly pretty quickly, but I’m prepared to have another go. The general obligations of a country which is carrying out a morally unjustified war of aggression[1] to the locals of the country it is invading are set out pretty clearly in the relevant Geneva Conventions, but what special obligations exist to local employees?

Personally I think this is pretty cut and dried. On grounds of fairness, the invading power should not discriminate between its employees on grounds of nationality, so they have a duty to give local employees the same kind of protection against harm that they would one of their own citizens. On prudential grounds, it is fairly obvious that any country has a long-term interest in establishing a reputation for protecting its employees. I am not convinced by any of the arguments against, most of which seem to involve fairly empty assertions about whether people might have been accessories to war crimes, combined with a strange insouciance about whether these alleged offences should be prosecuted in a proper court, or enforced ad hoc by death squads.

If anyone wants to argue either side of the case, go ahead. If you end up being convinced by my view, then perhaps you’d care to express this opinion to the British government. As far as I can tell, the most effective means to doing this (by far – the difference to the next best alternative is orders of magnitude) is by writing a letter or email to your MP. Dan Hardie has got a lot of anecdotal evidence that these letters have made a big difference so far in preventing this issue from being swept under the rug. (Update: You could ask your MP to sign Early Day Motion 401, tabled by Lynne Featherstone MP, please).

Comments policy notice: Just to make it clear, although this is a genuine invitation to a discussion, it’s a sensitive issue and will be moderated with extreme prejudice. In particular, racial epithets won’t be tolerated any more than they are on other CT threads. I am not going to delete or disenvowel people just for using the word “traitor” or equivalent, but nor am I going to tolerate blatant trolling. In which context I remind readers that the requirement for a genuine email address with every comment is still there, and the fact that it’s not particularly consistently enforced is not something anyone should rely on.

[1] Albeit one that was probably legal within the strict terms of these things, which in my mind simply shows it’s already much easier to start a war than it ought to be.

Via Matthew Yglesias, this is enough to make a cat laugh. As I’ve argued elsewhere, although the Mearsheimer & Walt “Israel Lobby” does have a referent which is a real and definable set of groups and institutions, this lobby really doesn’t have all that much to do with Israel. Every time this slightly scary bunch of warlike, paranoid and rather right-wing people are asked to make a choice between the national interests of Israel and their own vanity politics, it’s Israel that gets shafted. Any concern over “divided loyalties” or what have you is completely misplaced – the “Israel Lobby” are nationalists of a completely imaginary state, one which has no meaningful politics of its own, no need to compromise with reality and no national interests other than constant war.

Note also that the well-known South Africa analogy, which has been pronounced to be intrinsically bigoted and anti-semitic by the wisest heads outside Israel, is considered normal politics by the head of government of that country. I begin to think that the Israeli state (which has, over the years, played its part in giving these nutters much more prominence and credibility than they deserve) has been lately finding the wingnuttier wing of American “pro-Israel” politics to be more trouble than it is worth. There are all sorts of reasons one might have to be less than happy with the human rights record of the State of Israel, but as far as I can see they don’t deserve to be blamed for the extremely negative contribution made to public debate in English-speaking politics by the political organisation trading under their name.

Dennis Perrin, who I’ve just realised is the same bloke as the Dennis Perrin I used to have really nasty flamewars with on a mailing list five years ago, has a post up which, among other things, mentions a bumper sticker he recently saw which read:

“As Hillary, Nancy and Jennifer Rise In Stature, They Give New Meaning To The Phrase Ho Ho Ho!”

Well it got me thinking. Quite a number of points, below. I tried, but failed, to keep the footnotes under control this time.
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Dan Hardie just emailed me with some news about the Iraqi employees campaign. God help us all, but the compromise asylum arrangements have been so poorly publicised that several Iraqi employees have been left searching the internet for information and ended up at Dan’s blog.

I have, with permission, reproduced the whole of his post below the fold, but in summary we’re basically making another call on your good nature. The last set of emails and letters to British MPs worked, in as much as they pretty directly led to the Milliband statement and the announcement of asylum and resettlement packages. However, it’s clear that we need to keep making the point (politely) that the British blog reading public has not forgotten about this one, and to insist that the policy is generously and efficiently implemented. So basically, we need people to send emails and letters to their MPs. Crooked Timber readers have done us proud in the campaign so far and I hope we can rely on your support once more.

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