Cool commercial of the week

Bretton Woods II?

No way. Obama decided to stand on the sidelines, Bush is clearly not willing (or mentally fit) to craft a coherent plan, the developing countries seem to think this is an opportunity to slash a larger share of the pie and the Europeans were not very specific in their delineation of a regulatory "college". This was a bit disappointing, I have to say. Expect large losses in the stock market tomorrow. A good analysis of what happened and the coming attractions from Business Week here. The full text of the common statement of the G-20 here. There was actually one interesting idea: the insertion of the principle of anti-cyclicality into the banking sector. Andrew walker of the BBC expounds:

And here is one to set the pulse racing: "mitigating against pro-cyclicality in regulatory policy". That might actually turn out to be quite important.

The idea is to have banking regulation that does not exacerbate the cycle of boom and bust - indeed the aim is to moderate it.
'Dynamic provisioning'

Spain's system has attracted a lot of interest.

In effect, it requires banks to build up a financial cushion in the good years which can help them absorb losses in the bad times when increasing numbers of borrowers fail to repay.

The basic principle is not exactly financial rocket science, although the name it has - dynamic provisioning - makes sound as though it is.

The war of the sexes

The World Economic Forum has released the 2008 Gender Gap Index which combines economic, educational, political and health indices. The UK is in pretty good shape (21st globally), but still needs to do a lot on equal pay (81st). Greece is abysmally low and it is the political index that is so very disappointing (93rd out of 130). Actually, the United Arab Emirates score higher than Greece on this one! If anyone is quick to use the familiar "South European exceptionalism" excuses, just have a look at Spain (ranking higher than Britain on the table).

My post-election blues

Rebecca, that was very kind of you:)

Class-based affirmative action is the answer

From the Atlantic:

On the other hand, as the first black president, Obama is uniquely positioned to help persuade civil rights leaders that it is time to resurrect King’s idea of affirmative action as a set of programs for low income Americans of all races. He could point to King’s political insight that only a class-based emphasis would forge a potent black- and working-class-white coalition for real social change. And in phasing out race-based preferences, Obama could simultaneously put real money into the enforcement of important anti-discrimination laws to protect against bias in education, housing, and employment, a part of the colorblind agenda that no president has fully funded.

Hints of a new approach towards Russia?

Headlines from today's news:
1. Obama throws US missile shield into doubt.
2. EU resumes Russia talks isolating Lithuania.

and my favorite one for the day, from the IHT:
3. Reckless Georgia.

It is way too early to tell, but it's getting very interesting.

That racist vote

NYT reporting from the South is rather chilling.

One white woman said she feared that blacks would now become more “aggressive,” while another volunteered that she was bothered by the idea of a black man “over me” in the White House.
Mr. McCain won 76 percent of the county’s vote, about five percentage points more than Mr. Bush did, because “a lot more people came out, hoping to keep Obama out,” Joey Franks, a construction worker, said in the parking lot of the Shop and Save.
Mr. Franks, who voted for Mr. McCain, said he believed that “over 50 percent voted against Obama for racial reasons,” adding that in his own case race mattered “a little bit. That’s in my mind.”

Soros on financial market fundamentalism

Credit—whether extended to consumers or speculators or banks—has been growing at a much faster rate than the GDP ever since the end of World War II. But the rate of growth accelerated and took on the characteristics of a bubble when it was reinforced by a misconception that became dominant in 1980 when Ronald Reagan became president and Margaret Thatcher was prime minister in the United Kingdom.

The misconception is derived from the prevailing theory of financial markets, which, as mentioned earlier, holds that financial markets tend toward equilibrium and that deviations are random and can be attributed to external causes. This theory has been used to justify the belief that the pursuit of self-interest should be given free rein and markets should be deregulated. I call that belief market fundamentalism and claim that it employs false logic. Just because regulations and all other forms of governmental interventions have proven to be faulty, it does not follow that markets are perfect.

The whole article covers briefly his theory of reflexivity in the financial markets and can be found here.

Why do Scandinavians have to top this list too??

I really hoped Greece would have nailed this one, but it's the Danes again, alas.

Squaring the Guantanamo circle

One of Obama's first priorities will be to shut down the detention centers at Guantanamo. What he will do with all those prisoners is a legal riddle:

"There would be concern about establishing a completely new system," said Rep. Adam Schiff, D-Calif., a member of the House Judiciary Committee and former federal prosecutor who is aware of the discussions in the Obama camp. "And in the sense that establishing a regimen of detention that includes American citizens and foreign nationals that takes place on U.S. soil and departs from the criminal justice system — trying to establish that would be very difficult."

In my mind there is no way a liberal empire can survive for too long, without sacrificing either its liberal or its imperial credentials.

Al Gore's action plan for the new economy

The high priest of environmental reform explains his plan for transforming the energy industry in the US. A more holistic approach to the problem is provided by two Stanford economists. I must admit I do not know much about the state of this debate and remain skeptical to both sides. However, I cannot but feel that there is a tradeoff between economic growth and changing our whole energy infrastructure to go environment-friendly. To me there are two conflicting imperatives at work: a moral and an economic one. I totally respect both, but in times of economic crisis and when millions of people rise above poverty in the developing world the latter (at least temporarily) is of higher importance.

However, it is true that if we manage to wed Keynesianism (all those grids and factories that Mr. Gore talks about) to environmentalism that would be a miracle of human ingenuity. But will it work? Please leave comments and send links to seminal books/articles on this.

Update: The Economist runs a tirade against Obama's Green New Deal. Skip the article and go to the comments section where an actual discussion takes place. Once more, the readers are much wiser than the editors.

The ins, the outs and the what-have-yous of the campaign

Newsweek runs an exhaustive 7-chapter (!) special on the campaigns. I just finished chapter 2 and it reads like a novel.

Why did Obama win? (some numbers)

66% of voters between 18-29 voted for the Democrat
96% of blacks (!) voted for Obama
67% of Latinos voted for Obama (up by around 10%). An explanation for this can be found here.
52% of people earning more than 200,000 dollars who opted for Obama (these are the people who will carry the burden of Obama's tax increases)
58% of people holding a postgraduate degree voted for Obama
52% of Independents voted chose the Democrat
26% of voters were contacted by the Obama campaign
84% of Clinton Democrats finally went for Obama
17% of Bush 2004 voters went for Obama, 9% of Kerry voters went for McCain
51% of Americans think that government should be doing more (76% of them voted for Obama)
57% believe that Obama is in touch with people like them (the same number for McCain was 39%)

Some more here.

Why did McCain lose?

A collection of analysts ruminate. Your pick:

The political environment could not have been worse: an unpopular incumbent; an unpopular, costly war; and an economic calamity.

The irony is that McCain spent the past four years morphing from what the voters wanted into a diluted Republican. And he also seemed disadvantaged by a disorganized campaign.

When America has felt lost and uncertain about its prospects, as it does today, it has often searched for transformational leaders to steer it into the future -- FDR, JFK, Ronald Reagan. Was it within McCain's power to be that man? No. His campaign created a great narrative, a great story, but it was only about John McCain. He did not create a narrative, as Obama did, about where he would lead us and about where we, as Americans, were going. That, perhaps, was his failing. The bigger question is: Who built the Republican Party that doomed him?

McCain's biggest mistake was not going with his instincts and picking Joe Lieberman as his running mate. This would have allowed McCain to run a campaign based on bipartisanship and results-oriented policies -- what was best for the American people -- and not one geared toward the GOP's right wing.

Saying that "government is the problem" was okay for Reagan's inaugural, but it was politically untenable in today's economy. Exit polls Tuesday showed that, by an eight-percentage-point margin, voters said that government should be doing more rather than less -- an 11-point swing from four years ago.

Had McCain voted against the bailout of Wall Street firms and backed the Republican alternative, there is no question in my mind that he would have won. After calling attention to his "suspension" of his campaign, McCain compliantly and supinely embraced the Bush bailout backed by the Democrats. America was waiting for him to speak out against excessive government spending and against bailing out Wall Street firms for their greed.

Ain't no stoppin' us now

Dizzee Rascal for Prime Minister

Haha, Jeremy Paxman is such a cocky bastard.

Reality check

Obama's team are already trying to lower the expectations created by Tuesday's landslide.

With the Democrats falling short of a filibuster-proof 60-seat majority in the Senate on Tuesday, his agenda will probably require some modicum of horse trading for Republican support. Further complicating the picture, Mr. Obama’s winning coalition includes new voters who will be watching him closely but may not have patience for the deliberative give and take that accomplishment in Washington often demands.

I often tell non-American friends that one point not very well understood about American politics is how weak the Presidency actually is compared to many European governments with large parliamentary majorities. This is a point related to the system of checks and balances at the heart of American politics. The task is made even more complicated by Bush's 8-year legacy on public debt and international law. I hope the effect of the lame duck transitional period will be minimal.

KNOW HOPE

I have been following this campaign for nearly a year now (and quite intensely in the past 2 months) and today I am feeling quite hung over physically, emotionally and intellectually. The all-nighter and the alcohol galore by way of celebrations did not help. I have been trying to find something worth posting for some time now, but somehow nothing captures the moment quite accurately. It is as if opinion pieces, quirky videos, interesting exit polls and vivid photographs were worthless compared to the simple fact that yesterday the American community as a whole overwhelmingly voted for decency, intelligence, tolerance and HOPE.

I am not American by birth. I lived, studied, worked and travelled there for four years and I have quite strong feelings of affection for the country, its ideals and the fundamental decency of its people. Yet I also feel quite European in the sense that I have developed a certain amount of cynicism towards "the American Dream" and its overstretch as the backbone of American life. I could never reconcile these conflicting attitudes, or at least not any more than one can reconcile one's idealism with the complexity of real life.

Last night, however, as the exit polls and vote tallies were coming in, I felt that my personal ambivalence about America evaporated as the reality of a man who personifies the American Dream started sinking in. In his own words: If there is anyone out there who still doubts that America is a place where all things are possible; who still wonders if the dream of our founders is alive in our time; who still questions the power of our democracy, tonight is your answer.

While America's economy is losing its global edge, America's politics are leading the way redefining campaigning, rhetoric and message. In the years to come I look forward to seeing whether bad economics will trump good politics or vice versa. Last night and today, however, I am celebrating America's comeback as the great nation.

America votes

Come on America, you can do it.

My humble prediction:

Obama: 338 - McCain: 200 (I am inclined to add Missouri to Obama's electors, but I have decided to be a little cautious just because some friends are calling me partisan- imagine THAT)

Who is against the Euro now?

The Eurozone might expand soon as national governments come to see the perils of playing a little too much with the currency speculators. Denmark and Hungary are obvious candidates. I would add the UK to the list.

Fact check on the August war

The BBC, battered these days by English newspapers over a rather stupid radio scandal, reminds us why it is still the envy of many a public broadcasting agency.

Last poll-check

Is Obama "too European"?

Matthew Price strikes a half-note about Obama and some American voters:

It boiled down to a sense that he was just a little bit too different. He seemed to have a different outlook, something they weren't quite sure about. Something unfamiliar... For many the fact that Barack Obama is different is intoxicating. For many others it is something that leaves them unsettled... This is about the people who simply feel his policies, and his approach would not be good for this nation. This is why John McCain's focus on "Barack the Redistributor" has hit a chord with many segments of the population here.

One can understand the worries of these people. Obama may look and sound like a Martian to many older or less educated voters. But are these voters the "real America"? Is Obama really the Un-American candidate?

What I see in America is the epitome of modernity in all its aspects - the good (liberty, equality, rational pursuit of happiness) and the bad (corporatism, social dislocation, intense consumerism). Voting for Bush, however, looked like a reversal of this creed - people voted for him because he was folksy, religious and unencumbered by the complexities of modern times - he also descended from a very wealthy family, an aristocrat palling with the average Joe if you wish. In the last eight years Americans recoiled from modernity into a pristine past of us-vs.-them, cowboy-like straight talk. They voted for Bush because they thought they could have a beer with him in his ranch in Texas. Well, I think we know what the results of this retreat were.

Obama, instead, is the American candidate par excellence, because he is self-made, technology-savvy, intensely hardworking, practical and young. Due to these qualities he represents the return of the States to the values of dynamic modernity at the core of the American Dream, at least the way I understand it. But he goes beyond that. He is also intellectually sophisticated, receptive of other people's different opinions and moral codes and he is post-racial. These are qualities necessary to redefine the American Dream domestically because the States need to move beyond the divisive culture wars and the anti-intellectualism of the last decades. These qualities can also redefine the American position abroad because the US can no longer have a claim to unrivalled greatness.

Why you should go vote (?!)

This is tres cool and tres Starbucks. It is also a good example of preaching to the converted - I am referring to those latte-sipping liberals who are usually more educated, more politically savvy and more likely to vote anyways.

On second thought I have decided I really dislike this commercial: it implies that a profit-driven corporation becomes the standard bearer for a "healthy" community. Who cares what Starbucks thinks about voting? Why have we (progressive urbanites) allowed it to create so much cultural and political capital at the expense of non-market forces? Thank God this election is about real issues, competence and grassroots campaigning, rather than fake feel-good messages.

Update: The black guy wins the race

Unbelievable finish! Hopefully the other race will not be determined on the last lap.