http://www.thisamericanlife.org/radio-archives/episode/415/crybabies

“Rich people, when there is a shock, are much more vocal and much more self-pitying than the poor.”

 

The West is obsessed with lamenting over income and resources loss over the last three years. Some blame the government, some blame the market. Some invade Wall Street, some elect crazy Tea Partyers for the Congress, some burn down shops in London. To me, all are lost, and are heading in the wrong direction.

I just finished reading Fault Lines by Raghuram Rajan, which is a great account of the great recession, and the underlying reasons – fault lines – that made it possible. He ends on a positive note:

“We live in an age of plenty…This crisis has resulted from a confusion about the appropriate roles of the government and the market. We need to find the right balance again, and I am hopeful we will.”

This implies a couple of things to me. First – the developed world has been used to overexuberance; to spending beyond its means. This recession has been a waking up call, reminding that credit is not infinite; that owning a house is not a right but is something that could be achieved later in life when one has a more sustainable income, for example. Second, despite the decline in western living standards, the West is still decades ahead of the emerging economies, and centuries ahead of the least developed countries. Those that claim to be in the 99% of the United States are still, mostly, in the top ~5% of the world – it’s all relative, and it’s also important to take a breath and comprehend it all in perspective. Maybe I am saying this because I work in development and the data sets I crunch every day pertain to countries which are 90% poorer than Greece, but get 95% less attention in the news because they are not in the “painful process of defaulting” – so what if Greece defaults? They are still one of the richest countries in the world, on average – take that, Turkey, which has been snobby about this whole Greek debacle, acting as if it is richer than Greece.

Anywho. Pretty basic, I know, but I think it’s important to be more optimistic, to calm down and put it all in a global context. “Keep Calm and Carry On” was relevant 70 years ago, and it still is. Those invading Wall Street – vote for a government that will provide you safety nets and sustain economic growth with productivity, not cheap credit. Those voting for the Tea Party – be realistic about government’s roles in people’s lives, not just yours. And policymakers in Europe – it was all nice when you reaped the benefits of Euro for 10 years, now make sure your currency does not go under again.

That’s my two cents on the state of the world right now. If you excuse me, I’ll continue reading about how the aid budgets are being cut around the developed world, and get upset about why that’s not getting any attention in the news but those who are occupying Wall Street are.

Very interesting analysis of the Portuguese labor market – important implications for many European economies that have very high labor regulations as well as low productivity.

1) Abhijit Banerjee talks very much like Orhan Pamuk. Uncanny and extremely “cute” resemblance.

2) I am (almost) done finishing his book Poor Economics, which has definitely been very interesting. Mostly defending demand-side interventions and underlining the importance of understanding why the poor act the way they do, I’ve found the book to be extremely valuable – although, at times, it slides into defending certain actors/policies more evidently than others (which is perfectly fine to do I guess, given the fact that the book does not assume any objectivity).

Anyways. Back to Norway. Last night I downloaded Breivik’s >1,500 page manifesto, and skimmed it (skimming is an overstatement, I probably skimmed 1/10 of it). Needless to say, it’s a mad man’s manifesto. Why would anyone ever undertake such a massive attack, declare himself as a crusader, set fire on young adults/adults? And in Norway, out of all places?

I see this as the culmination of what has been boiling under the surface in Europe since 2000. While I regard Sciences Po as (mostly) an academic waste of time, a class I took on French and European politics has thought me something: the European national populist/extreme right is dangerous, and boy are they getting stronger. Furthermore, today’s chaotic developed world that is only getting worse by the day is making these people more relevant: blame it on the Muslims! Blame it on European integration! Blame it on immigration!

Everyone is, of course, entitled to their views – and so is the extreme right. What is making them more powerful, and what is making them gain legitimacy, is that the center right is buying into this point of view and is further sliding towards the right: last spring, Sarkozy started a debate on national identity and secularism, further blaming the Muslims. Last fall, Merkel declared that multiculturalism has failed. Rather than trying to be reconciliatory and embracing immigration, which has, of course, helped them tremendously while financing their industrial boom, the European center right essentially caved in to what the previously-marginalized extreme right has defended for years. Keep the Muslims out of Europe, stop European integration once and for all, and boom: things will turn back into the good old days.

But you know what, Wilders/Breivik/Le Pen? Globalization and integration has set forth an irreversible path, and it has brought your countries tremendous benefits. And today’s crisis cannot be solved with shooting youth camps, or building barbed wires around your countries to stop immigrants or integration: on the contrary, more integration and less partisanship will solve problems in both Europe and the United States. What is more important is that Merkel and Sarkozy and other prominent European/American leaders understand this, and shape their policies accordingly: defend the European ideal, defend the rights of those immigrants who have turned your country into what it is right now.

Things are indeed sliding in all directions, and European mainstream politicians have to take control of this. The center-right has to marginalize these parties – or else, Breivik creating havoc in Norway can soon turn into extreme right presidents ruling (most) European countries. And no one needs that.

Futbol hic bir zaman icin sadece futbol olmamistir. Yeri geldiginde ulkelerin, halklarin direnislerinin bir sembolu olmus, yeri geldiginde bir diktatorun halkini uyutma, uyusturma kaynagi olmustur. Sosyal/siyasi boyutunu da gectim; milyar dolarlarin dondugu bir endustridir futbol.

Hal boyleyken, Turkiye de bir futbol ulkesiyken, Fenerbahce’nin de icinde bulundugu sike skandalina bir de bu gozle bakmak lazim derim ben. Futbolda sikenin dondugu dogrudur, ama bu sike ne sadece tek takima mahsustur, ne de sadece tek sezona mahsustur. Fenerbahce’nin icine dustugu duruma sevinen taraftarlar bir de bu acidan bakmali bence: demokrasi sampiyonu, merkez sag hukumetimizin o kocaman gorunmez eli kendisini futbola da sokmus olmasin mesela?

Ayni taraftarlarimiz bu olaya bu acidan baktiklarinda, bagimsiz bir yargiya ne kadar ihtiyacimiz oldugunu da anlayacak, bir futbol stadi acilisini siyasi propagandaya ceviren TOKI baskaninin nasil bakan oldugunu da sorgulayacak. Futbol milletin aynasidir; futbol bizim aynamizdir. Ve bagimsiz yargiya, bagimsiz karar veren mercilere, temiz bir yonetime hepimizin ihtiyaci var: hem de her zamankinden cok. Ihtiyac ile mevcut durum arasindaki bosluk da her zamankinden cok maalesef ki. Insan uzulmeden edemiyor; okyanus otesinde yasasa da.

“Sweden didn’t do much in terms of special, one-off efforts to spend money to combat the downturn. There was some extra infrastructure spending and a well-timed cut to income tax rates, but the most basic response to the government was to do what the nation’s social welfare system — lavish by American standards — always does: Provide income, health care and other services to people who are unemployed.”

Which is why a welfare system, as well as more regulation, should be considered; even by the richest. Government is not bad – inefficient and failing government is, which is what the United States is heading towards.

The Economist sees the world in an interesting way. It calls for austerity budgets, denounces fairness, wants a lean and efficient government, but when it comes to defense spending, boom: spend more! Of course, this is in line with the typical conservative point of view, but still: in today’s world, I would expect more sense from The Economist.

But the debt crisis means that European countries are cutting defence spending. Just three now reach NATO’s target of spending at least 2% of GDP on defence: Britain, France, and Greece. Several spend 1% or less. This compares with America’s commitment of some 5% of GDP. As America, too, starts to pare back defence, it will become more critical of European free-riders.

Out of these countries: France will keep on spending more because of Sarkozy, who longs for the grandeur of those good old golden days. Britain’s military past doesn’t give it any right to brag: Blair’s biggest mistake was supporting the Iraq War – which was endorsed by The Economist, which retracted its support afterwards. And Greece – the best thing Greece could do right now would be to sign an agreement with Turkey, solve the Aegean dispute, and jointly reduce arms so that both countries can devote more of their resources to things that actually do matter.

But no. If you see the world from The Economist’s point of view, you should cut taxes, and still spend >2% of your GDP on defense. Ironically, the same issue has an article supporting nuclear nonproliferation. They clearly draw the line somewhere I would not.

It’s time to take the Tobin tax seriously | Neil McCulloch | Global development | guardian.co.uk.

great point, extremely doable. of course, this idea has been around since the 80s, the world has seen serious financial crises since then that were mostly due to wall street going crazy (not to neglect other global imbalances, of course), and despite all of these opportunities to “tame” finance, it was not implemented. probably won’t either, but oh well.