Daniel’s post on Stiglitz and the cost of the Iraq war reminded me to get going on one I’ve had planned for some time, as a follow-up to this one where I pointed out that the $50 billion in aid given to Africa over the past fifty years or so is not, as is usually implied, a very large sum, but rather a pitifully small one, when considered in relation to the number of people involved, and the time over which the aggregate is taken.

What are the sums of money worth paying attention to in terms of economic magnitude. I’d say the relevant order of magnitude is around 1 per cent of national income[1], say from 0.5 per cent to 5 per cent. Smaller amounts are important if you’re directly concerned with the issue at hand, but are impossible detect amid the general background noise of fluctuations in income and expenditure. Anything larger than 5 per cent will force itself on our attention, whether we will it or not.

To get an idea of the amounts we’re talking about, US national income is currently about 12 trillion a year, so 1 per cent is $120 billion a year. A permanent flow of $120 billion a year can service around $6 trillion in debt at an interest rate of 4 per cent, so a permanent 1 per cent loss in income is equivalent to a reduction in wealth by $6 trillion.

For the world as a whole, income is around $50 trillion, so the corresponding figures are $500 billion and $25 trillion.

What kinds of policies and events fit into this scale?

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Further to my post the other day on Kosovo, and whether or not it sets a precedent for other would-be secessionist movements, I’d just like to note a very interesting piece by Pratap Bhanu Mehta in the Indian Express, which I found thanks to Chris Brooke at the Virtual Stoa. Mehta draws on Michael Mann’s work on “the dark side of democracy” to argue that the Kosovo case does indeed threaten future instability. On the immediate political pragmatics, whilst Mehta is surely right to argue that the backing of the US and other Western powers meant that the Kosovo Albanians were under no pressure to negotiate a solution that fell short of independence, defenders of independence can reply that, given what has gone on since 1990, they would have had no reason to believe anyway that remaining within a Serb-dominated state would given them even basic safety, let alone more extensive human rights guarantees. That disagreement aside, Mehta makes a good deal of sense on the connections between democracy, ethnic homogenization and the disastrous doctrine of national self-determination:

bq. In the 19th century, there was a memorable debate between John Stuart Mill and Lord Acton. John Stuart Mill had argued, in a text that was to become the bible for separatists all over, including Jinnah and Savarkar, that democracy functions best in a mono-ethnic societies. Lord Acton had replied that a consequence of this belief would be bloodletting and migration on an unprecedented scale; it was more important to secure liberal protections than link ethnicity to democracy. It was this link that Woodrow Wilson elevated to a simple-minded defence of self-determination. The result, as Mann demonstrated with great empirical rigour, was that European nation states, 150 years later, were far more ethnically homogenous than they were in the 19th century; most EU countries were more than 85 per cent mono-ethnic. Most of this homogeneity was produced by horrendous violence, of which Milosevic’s marauding henchmen were only the latest incarnation. This homogeneity was complicated somewhat by migration from some former colonies. But very few nation states in Europe remained zones where indigenous multi-ethnicity could be accommodated.

“Matt Yglesias”:http://matthewyglesias.theatlantic.com/archives/2008/02/poor_form.php complains that Harold Ickes shouldn’t be dishing the dirt before the Democratic primary is over. But _isn’t_ it over for all intents and purposes? Barring an act of God, it looks as though Obama has won. Matt’s co-blogger “Marc Ambinder”:http://marcambinder.theatlantic.com/archives/2008/02/we_need_to_start_with.php runs the delegate numbers and finds that:

Playing with the numbers a bit, here’s how [Hillary] could – in theory – accomplish this. If Florida and Michigan’s delegations are seated fully to her advantage, and if she wins in Ohio by 65% and wins in Texas by 65%, and all other percentages hold, she can win the nomination.

In other words, she’s the horse-race betting equivalent of a super-Yankee accumulator. Perhaps something entirely unexpected will happen (I note again that I don’t have any particular expertise in US electoral politics, and am relying on Ambinder’s calculations here), but it seems to me highly unlikely indeed that she can pull off an upset.

From today’s Times:

bq. For the first time in the nation’s history, more than one in 100 American adults is behind bars, according to a new report. Nationwide, the prison population grew by 25,000 last year, bringing it to almost 1.6 million. Another 723,000 people are in local jails. The number of American adults is about 230 million, meaning that one in every 99.1 adults is behind bars. Incarceration rates are even higher for some groups. One in 36 Hispanic adults is behind bars, based on Justice Department figures for 2006. One in 15 black adults is, too, as is one in nine black men between the ages of 20 and 34.

Here is an older post about how the U.S. incarceration rate compares to other countries. Here is Becky Pettit & Bruce Western’s (2004) ASR paper, with its frankly astonishing result that in the cohort born between 1965 and 1969, thirty percent of black men without a college education—and sixty percent of black men without a high school degree—had been incarcerated by 1999. Recent cohorts of black men were more likely to have prison records (22.4 percent) than military records (17.4 percent) or bachelor’s degrees (12.5 percent).Here is Bruce Western’s Punishment and Inequality in America, a superb analysis of how the prison system is now a key instrument not just of social control, but also social stratification, in America.

I’ve been too busy with teaching responsibilities the last several days to link or respond to various posts that other people have put up on taxes, collective goods, and related questions, so I’m going to declare intellectual bankruptcy, and just tell you to read “Laura McKenna”:http://11d.typepad.com/blog/2008/02/more-on-the-tax.html, “Will Wilkinson”:http://www.willwilkinson.net/flybottle/2008/02/22/moral-duties-in-contexts-of-partial-compliance/ and “Russell Arben Fox”:http://inmedias.blogspot.com/2008/02/taxation-and-democracy-101-on-lucky.html. But I also wanted to point to some interesting stuff that’s been happening in Germany, which is sort of related to this question. The _Financial Times_ has been running stories for the last week or so about a disgruntled former employee of a Liechtenstein bank, who has sold a list of the beneficial owners of various trusts in Liechtenstein to the German tax authorities for several million dollars.
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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.

Well, _I_ thought it was worth passing on ….

More here on what went into creating it. I definitely appreciate the level of detail (e.g., the blinking line in the search box and the changing cursor).

The “NYT obituary”:http://www.nytimes.com/2008/02/27/business/media/27cnd-buckley.html?_r=1&hp&oref=slogin is here.

Update: “Rick Perlstein”:http://www.ourfuture.org/blog-entry/why-william-f-buckley-was-my-role-model writes that William F. Buckley was his ‘role-model.’ It’s an interesting piece.

I’m hard on conservatives. I get harder on them just about every day. I call them “con men.” I do so without apology. And I cannot deny that William F. Buckley said and did many things over the course of his career that were disgusting as well. I’ve written about some of them. But this is not the time to go into all that. My friend just passed away at the age of 82. He was a good and decent man. He knew exactly what my politics were about—he knew I was an implacable ideological adversary—yet he offered his friendship to me nonetheless. …

Then came a very nice column. The passage from my book he reproduced quoted a “liberal” reporter on Goldwater: “What could such a nice guy think that way?”

Why did I love WFB? Because he never would have asked such a silly question. The game of politics is to win over American institutions to our way of seeing things using whatever coalition, necessarily temporary, that we can muster to win our majority, however contingent—and if we lose, and we are again in the minority, live to fight another day, even ruthlessly, while respecting our adversaries’ legitimacy to govern in the meantime, while never pulling back in offering our strong opinions about their failures, in the meantime. This was Buckleyism—even more so than any particular doctrines about “conservatism.”

Nice people, friends, can disagree about the most fundamental questions about the organization of society. And there’s nothing wrong with that. We must not fantasize about destroying our political adversaries, nor fantasize about magically converting them. We must honor that some humans are conservative and some humans are liberal, and that it will always be thus. …

Buckleyism to the end: friendship, and adversarialism, coinciding. All of us who write about politics, may that be our role model.

Update 2: See “Brad DeLong”:http://delong.typepad.com/sdj/2008/02/a-historical-re.html and “Patrick Nielsen Hayden”:http://nielsenhayden.com/makinglight/archives/009999.html#009999 for different perspectives.

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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Various European governments (and sundry commentators) are exercised by the Kosovan declaration of independence, on the grounds that this creates a dangerous precedent and will undermine the integrity of sovereign states. If Kosovo gets independence, they worry, then the Scots, the Welsh, the Basques and the Catalans won’t be far behind. Well that would indeed be a worry if the right principle is one that national groups may simply elect to separate on the basis of some supposed right of nations to self-determination. But as I’ve blogged before, there are other candidate principles that we could invoke. If we follow Allen Buchanan, and see secession as a remedial right for groups that have suffered serious injustice and sought and failed to obtain a remedy, then things will look different. The Catalans, Welsh and Basques may have been in this position in the past, but it is hard to see that they are now, given the combination of regional autonomy and language rights that they enjoy. The Kosovo Albanians, on the other hand have both suffered injustice and have no good reason to believe that a just settlement is possible within Serbia. Buchanan’s principle seems to discriminate in a plausible way.

In the February edition of Prospect, William Skidelsky has a piece on the decline of book reviewing. As is standard for any adverse trend in the early 21st century, blogs get a fair bit of the blame. The write-off (lede for US readers) says

the authority of critics is being undermined by a raucous blogging culture and an increasingly commercial publishing industry

and the conclusion is

blogging is best suited to instant reaction; it thus has an edge when it comes to disseminating gossip and news. Good criticism requires lengthy reflection and slow maturation. The blogosphere does not provide the optimal conditions for its flourishing.

As a slow, mature critic, I’m sure Skidelsky is well placed to make authoritative judgements of this kind, based on the kind of lengthy reflection unknown to gossipy bloggers. Still, it would help us instant-reaction types to follow him if he had, you know, cited some actual blogs, perhaps even some that run book reviews.

Hilzoy, “rejoicing the departure”:http://obsidianwings.blogs.com/obsidian_wings/2008/02/ding-dong-the-w.html of the truly odious William J Haynes II, provides this mind-squirbling story from Haynes’ earlier career.

In this amazing brief, Haynes argued that bombing a nesting site for migratory birds would benefit birdwatchers, since “bird watchers get more enjoyment spotting a rare bird than they do spotting a common one.” Moreover, he added, the birds would benefit as well, since using their nests as a bombing range would minimize “human intrusion”. The judge’s comment on this novel line of argument: “there is absolutely no support in the law for the view that environmentalists should get enjoyment out of the destruction of natural resources because that destruction makes the remaining resources more scarce and therefore more valuable. The Court hopes that the federal government will refrain from making or adopting such frivolous arguments in the future.” (pp. 27-8)”

I once voiced my suspicion that Fafblog had retired because nothing, not even an entity with the godlike powers of the Medium Lobster, could out-lunatic Norman Podhoretz. I was wrong. William J Haynes II could out-lunatic Norman Podhoretz without raising a sweat. Sadly, the Medium Lobster isn’t even in the race.

I’m responding tonight to a talk by Wendy McElroy entitled Don’t Vote — Its Immoral, and it Wastes Your Time. I haven’t yet read the talk, so like everyone else I am trying to work out my response with a bit of guesswork (I’m going by what she says here, and using some license to work out my own thoughts). I’ll post my own comments later, but for the moment, I’m dismayed to see the reaction the publicity for her talk has provoked. Here is my colleague Lester Hunt’s account (he has borne the brunt of it) and here is the article from the local paper, followed by a remarkably anti-intellectual set of comments. There’s nothing like this sort of reaction to disarm a respondent — I find myself wanting to defend her in my comments. But it’s ok, I won’t.