Back to the roots

From the Economist, an indication that the large exodus of migrants from "core" countries has already started:

Latinos are among the hardest hit by the economic downturn in America. The unemployment rate among all Hispanics rose to 8.8% in October, according to government figures, well above the national unemployment rate of 6.5%. It is expected to be worse still for Hispanic immigrants, whose unemployment rate already stood at 7.5% in the first quarter of this year; though their numbers are declining fast. The Mexican government said last week that the number of its citizens who left to live abroad this year was down more than 40% compared with 2006, and America’s Border Patrol says it caught 18% fewer people in the fiscal year that ended in September than in the one before.

A similar phenomenon is happening in Europe where a lot of Eastern Europeans have, for example, started moving out of places like England and Spain. If history has any lessons to offer, these people will go back to their countries and stir up politics there.

Pointless squabble of the week

A few days ago Jeremy Clarkson of the Top Gear fame called Greece "a toilet". Which is not very far from the truth, with regards to the urine/alcohol/puke-studded resorts in Rhodes the lads and the lasses from Manchester leave behind at the end of the summer. Needless to say, the Greek blogosphere was promptly flooded with denunciations of "that fucking twat" (my translation).

And so it was that Greece was added to the never-ending list of countries Jeremy has offended. What can one say? The man is a legend. Apparently, there is some history behind this:

David Cameron's ideas

A review of two books on Cameron and his program uncovers some of his principles. Cameron is basically a Burkean and Oakeshottean conservative, radically mistrustful of big government plans to engineer society, a crusader against the corrupt political classes and enamored with the power of small community to generate social welfare:

According to the Cameron analysis, New Labour offers change from the centre, the Conservative party change from below. Belief in Burke's "little platoons"—bodies like the women's institute, independent universities, a decentralised NHS, self-governing schools, the voluntary sector—underlies everything that Cameron says. This vision is intellectually coherent, and far more rooted in Tory thinking than critics inside the Conservative party have ever acknowledged. Cameron's political beliefs, applied in 21st-century Britain, would subvert the way we are governed.

Aside from the obvious objection raised in the article, that is whether Cameron the PM would willingly relinquish the power Westminster has amassed over the last years, there is always the issue of timing:

- Can this ideology survive a time of crisis, when BIG governments emerge as the only guarantors of good market functioning?
- With the decline of the City of London, Britain might be heading for another restructuring of its economy. Can the "little platoons" produce the economic edge that will get the British economy out of depression?
- Less government means less redistribution of wealth. With the middle classes in the US and England grumbling about the widening gap between them and the upper 2-3%, is it possible to revert to a more "hands-off" approach to tax and spend?

Time will show.

The meaning of Mumbai

In a gem of an article at the Atlantic by Bob Kaplan:

...the immediate result of the Mumbai terror attacks will be a further hardening of inter-communal relations within India. The latest attacks will also increase the likelihood that in national elections slated for early 2009, the result will be a BJP-led government, as Hindus, who comprise the overwhelming majority of Indian voters, take on another layer of insecurity.

Internationally, this event will further aggravate Indian-Pakistani relations, making it harder for the incoming Obama Administration to effect a rapprochement between the two countries, necessary for progress in Afghanistan, where the two subcontinental states are engaged in a proxy struggle that goes on behind the immediate conflict between the United States and al-Qaeda.

But the real story is India itself, whose undeniable rise as a major world power is being threatened by these civilizational tensions

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Believe it or not, I have a personal story to share about the bombings. A very good friend of mine and roommate in college recently married an Indian woman and moved to Mumbai. Two days ago I was on the phone with him, catching up after almost two months. We had already talked for almost an hour about life in India and Mumbai's city centre, when the connection was cut off abruptly. I tried to call a couple of more times, but to no avail - a lady in distinctly Indian accent would inform me connection was not possible- so I hang up thinking the battery of his phone must have died. It was only three hours later that I realized Mumbai was hit and that the network got completely clogged the first few minutes after the attack. There was no way they could have been hurt - he was talking to me from home and safely. Still the immediacy of the whole thing disturbed me thoroughly.

I eventually reached him the following afternoon. He sounded concerned, but in his usual jest he played down the danger. He did mention, however, that a few hours before the attacks he was having dinner with his wife in a restaurant next to the cinema that was eventually targeted by the gunners. After dinner, he had suggested that they watch the new Bond film, but she was too tired and wanted to go home. And so they did. Now, you tell me if life isn't funny sometimes.

War between private and public sectors

One of the many collateral damages inflicted by the depression is, I believe, the revival of the 80's war between public and private sector employees in European countries. Not that the conflict was not always latent, but it's time it came to the fore again. David Cameron, the Tory leader, has already started gathering the troops for a potential retrenchment of the public pensions system in Britain:

“We have got to end the apartheid in pensions,” he said, where growing numbers in the private sector rely on, usually much less generous, defined contribution pensions but public employees still enjoy final salary schemes largely paid for by the taxpayer.

Private and public sectors, at least in my mind, often represent two different drives of society, one that is mercurian and risk-loving and the other that is conservative and risk-averse. Because the former is substantially more dynamic, it is also more volatile and initiates political turbulence.

And this is what is going to happen now: for many years policy analysts have stressed the importance of reforming an unsustainable public pensions system, but it will take the disenchantment of the private sector to finally put conventional wisdom into practice. This is, of course, quite ironic, because the public sector has absolutely nothing to do with the current economic crisis - in fact the collectivization of risk in a public pensions scheme has seen its appeal increase recently. Not to mention that tying pensions to the stock market has proven to be an incredibly stupid idea. Yet the public sector might stand to lose a lot from the thrift epidemic among employees in the private sectors of the economy.

Waltz with Bashir

Two days ago I watched one of the most touching and thought-provoking political movies I have seen recently and, no, it was not the much awaited Baader-Meinhoff complex (that was very chaotic and very substandard, unfortunately). In the Persepolis tradition, Waltz with Bashir treats the problems of the Middle East through the medium of animated documentary, because the madness of it all is not easily captured by realistic movie-making. The film does not aspire to be anything more than the personal struggle of a former Israeli soldier to come to grips with the 1982 Sabra and Shatila massacre which he had witnessed in person. In 90 minutes the soldier-turned-filmmaker progresses from complete obliviousness to cathartic self awareness by interviewing former cosoldiers about their shared experiences in Lebanon.

It is a very personal movie and will prove difficult to swallow for those looking for a clearcut political statement. Yet it is astonishingly beautiful (watch the video above and you will understand) and it captures how hopeless people are when confronted with the reality of modern war. The motives of these soldiers (a recent break-up, masculinity problems, an obsession with slick martial arts) look so absurd that they are funny, but they are, after all, the only narratives that matter to young men who are asked to become cogs in a military machine. The contrast between reality and personal illusion makes the film good, but it is the decision to reflect this through the animation medium itself that makes it really great. At the end of the day, talking things through and hindsight self-reflection are singled out by the filmmaker as potent healing tools. Politicians could use some of his advice, I guess.

lending after a bailout

After the massive bailout of Citigroup on Sunday, I was left wondering why the banking sector has so far not bounced back and started lending again with all this taxpayer money at its feet. Robert Peston (who, by the way, has become a journalistic superstar in the UK since the Northern Rock bailout) drops a hint:

Against that backdrop, the question is whether it is remotely sensible to put a deadline - implicitly or explicitly - on the repayment of all that taxpayer funding for banks.
But if we don't demand our money back, we'd be formalising that there's been a semi-permanent nationalisation of the entire banking system.
And that would massively encroach on the ability of our banks to operate as independent commercial entities.
There would be massive political pressure on them to become quasi-social utilities, providing loans at the behest of ministers and officials rather than on the basis of commercial criteria.
So here's what may turn out to be the choice: less lending for years or public ownership of the banks for the foreseeable future. It's not an easy choice, is it?

Read the whole entry; it is a true tour de force. Or a good sample of, as Alastair Campbell once put it, "the Peston School of smartarse journalism". Peston can afford to be a smartarse these days.

Geithner, Summers and co.

The NYT editorial today, one day after the introduction of Obama's economic advisers poses the right questions:

As treasury secretary in 2000, Mr. Summers championed the law that deregulated derivatives, the financial instruments — a k a toxic assets — that have spread the financial losses from reckless lending around the globe. He refused to heed the critics who warned of dangers to come... Mr. Summers now will advise a president who has promised to impose rational and essential regulations on chaotic financial markets. What has he learned?

At the New York Fed, Mr. Geithner has been one of the ringmasters of this year’s serial bailouts. His involvement includes the as-yet-unexplained flip-flop in September when a read-my-lips, no-new-bailouts policy allowed Lehman Brothers to go under — only to be followed less than two days later by the even costlier bailout of the American International Group and last weekend by the bailout of Citigroup.

So far, Obama's appointments have been rather moderate and pragmatic. Something is sorely lacking though, and that's creativity for the array of new policies necessary to turn the economy and America's image in the world around. This is the reason why I am not a big fan of the Clinton appointment as Secretary of State. Another reason for opposing her is that, if her campaign serves as an indicator, she will not be a good manager of the diplomatic corps. I do not, however, think that she will be undermining Obama's leadership. She knows very well that the Democrats will be Obamaland for the next 8 years and she might as well partake of the Obama brand.

PS. Apologies for the 6-day silence, GREs and PhD apps took their toll.