Saturday, August 07, 2004

We're on autopilot

After reading this article, it occurred to me…is our national and foreign policy running on auto-pilot? Do we hear of phone calls from Bush to Putin demanding that he address the Yukos issue to ensure oil price stability? No. Yeah sure, behind the scenes via back channels etc., but how about public posturing/political pressure and the face-to-face style that all modern US presidents have embraced, thereby utilzing every tool in the political toobox?

The president has visited the mid-East twice in the entire time he’s been in office, both times to make speeches, spending no more than 3 days each. His engagement with NATO is nil. Powell is not the president yet he’s acting like one in front of foreign leaders on Bush’s behalf, not to mention Bush’s record days in office on vacation, in this day and age.

I remember a time once when presidents traveled around the world to assert US leadership that the world respected and was, indeed, guided by. Now, we only know how to flex our military muscle (a blunt instrument of power, recognized since Sun Tzu to modern guerilla war strategist Ho Chi Minh) and apparently have lost the ability to practice the lost arts of diplomacy and international politics.

Results of this presidency and Republican-controlled Congress are irrefutable. What’s more damning, as history will show, the Democrats had nothing to do with it as Republicans have full sway (as possible in a representative demcracy short of a single-party system) to do whatever they want to for 4 years now. And what’s tangible to show for? Something to really think over in the next few months.

Friday, August 06, 2004

The nature of the job deficit

Supply-side, debt driven economics does not work. After the latest US jobs reports states that only 32,000 jobs (vs. the 250,000-300,000 expected) were created last month, The Economist states it head on:

It is becoming increasingly apparent that the gains from America’s productivity-led recovery have been unevenly distributed. Corporate profits are strong, and business investment leapt by almost 9% in the spring. But pay has lagged behind, and the wages of production workers have stagnated. Of course, through its tax cuts, the White House has done its best to provide what employers will not—a substantial boost to take-home pay. But the effects of those tax cuts are beginning to fade, just as prices at American petrol pumps rise.

What consumers do not earn, or receive back from their government, they must borrow. Household debts grew by more than 10% in the first quarter, and now add up to more than 115% of disposable income. HSBC, a bank, says that the recovery is built on “marshlands of debt”. With interest rates now rising, this ready source of spending power may be about to dry up. Indeed, the beige book reports that borrowing by homebuyers declined in San Francisco and New York, two of the hottest property markets in the country.

Thursday, August 05, 2004

Food for thought

Contrary to perception, the single-most important reason developing African countries are underdeveloped is a gross lack of nutritious, affordable foods. The why's vary: Geography, political turmoil, meddling by the British empire...the list goes on.

Lest we forget the basics of economic development, satiating hunger should also be a priority alongside the massive US' AIDS/HIV initiative (which now prescribes use of expensive Western cocktail drugs vs. generics w/ vitamin supplements). More investment and attention is required in smart nutrition as well as developing and planting more productive crop strains, which doesn't require big programs to administer or much money to start-up.

There is an overwhelming amount of data available (outlined below) that draws a clear picture of the best ways to tackle this problem. For next tax season, you might consider a donation to a relief organization today.

There are 800,000,000 people at stake.

Quoted from The Economist - Food for thought:

....Western experts tend to tiptoe around the issue of how malnourishment makes people less intelligent, but local experts sometimes do not. "If your brain is stunted when you are young, that affects the decisions you make in later life. If you can't do simple arithmetic, you won't invest wisely. The cost of that will be very high," says Tomaida Msisika, a consultant on food security in Malawi. Sam Chimwaza, an analyst for Malawi's Famine Early Warning Systems Network, says that the reasoning ability of people in rural areas has been affected by malnutrition and it is hard for them to execute simple instructions. "They can work as servants in the city for two or three years and still not figure out how to adjust the temperature on an iron," he says.

Several pieces of research have shown the broader economic effects of these problems. A study on Zimbabwe found that children exposed to a drought completed on average nearly five months less schooling (and were 2.3cm shorter than expected). It estimated that this resulted in a loss of 7-12% of lifetime earnings. At a somewhat larger scale, the World Bank estimates that in low-income countries, the net present value of causing children to be born of normal rather than low weight would be about $580 per child. That is more than a year's average income in a typical sub-Saharan African country...