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How Trump Killed The Anti-Government Protests In Iran

How Trump Killed The Anti-Government Protests In Iran

By very strongly and publicly supporting them and dragging the matter to the UN Security Council   Of course, his supporters have been praising his “strong action” in comparison with Obama’s quiet approach to the 2009 demonstrations, meant to reduce accusations of the demonstraters being US pawns.  Those demos went on a long time with large numbers eventually killed.  In this case, Trump has made the government’s case, and the demos seem to have all but stopped since he took his strong tweeting “action.”

As it is, maybe he did them a favor as clearly the government has been prepared to crack down. Only 20 and one security person) this time.  His strong action has reduced the ultimate bloodshed.

Barkley Rosser

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Does Iran Have A “Poland Problem”?

Does Iran Have A “Poland Problem”?

Maybe somewhat, but not as much as Poland does, with a “Poland problem” being where a well performing economy does not prevent political unhappiness.  Iran is experiencing massive demonstrations that are heavily driven by economic complaints, even though economic performance has improved since the adoption and approval of the JCPOA nuclear deal.  Prior to that, in the face of economic sanctions, the Iranian economy was in recession, with GDP actually declining.  Unhappiness with this led to the election of moderate Rouhani as president, who negotiated the JCPOA, which led to the end of most, but not all (especially those by the US), of the economic sanctions.  As a result, oil exports have risen, and GDP has been growing at 4.5% recently, but it seems that few of the gains from this have “trickled down,” with inflation now rising above 10%.  Aggravating the situation is perception of corruption by the ruling clerical elite, who control large portions of the economy through the bonyad religious foundations.  An irony is that many of those enterprises were once owned by cronies of the former Shah with his regime accused of corruption.

This is a very complicated situation, and I think we do not have full information about all that is going on.  However, while some of the protests have aimed at Rohani, increasingly some of it has been directed at the top leader, the Vali-e-faqi, or Supreme Jurisprudent, the unelected Ayatollah Ali Khameini, with reports of crowds chanting “Death to Khameini” and burning photos of his face.  It also should be noted that while not nearly as deadly as the Green Movement demonstrations against apparent electoral fraud in 2009, they seem much more widespread across many cities in Iran, while the 2009 events were largely in Tehran and a few other largest cities.

It is important to keep in mind how power is held and distributed in Iran as one sees all kinds of characterizations about it, including declarations that Iran is a “dictatorship.”  It is not, but it is true that the unelected leader (Khameini) has more power than an elected one (Rouhani).  In particular, Khameini is the Commander-in-Chief of the military as well as being in charge of the judicial system based on Shia Sharia, as the proper translation of his official title as “Supreme Jurisprudent” indicates.  While he does not directly control them, it is the clerical hierarchy under him, along with parts of the military, that control the bonyads that constitute probably more than a quarter of the economy, which also has indicative planning and a substantial state-owned sector.  This latter part is more under the control of the elected president and his economics minister, as well as having more control over the Iranian central bank.

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The Poland Peoblem: How A Good Economy Does Not Guarantee A Good Politics

The Poland Peoblem: How A Good Economy Does Not Guarantee A Good Politics

This is personal and professional.  My wife and I have the third edition of our comparative economics textbook now in press at MIT Press.  We have chapters on transition economies, and one is on  the Polish economy.  The standard story is that Poland has been the great success story of transition (now accepted to be over pretty much everywhere for awhile now).  It adopted largely western market capitalist institutions successfully, while avoiding mistakes made by other transition economies.  It avoided dismantling its social safety net.  It was careful about privatizing state-owned enterprises, and in fact continues to have a higher percentage of its output run by them compared to most other such economies, with this tied to its lower rate of corruption than many of them.  While it joined the EU, it avoided giving up its currency, which allowed it to devalue and preserve economic growth even as EU nations fell into recession.

Indeed, the ultimate economic success of Poland came during the Great Recession when it was the only nation that did not go into recession at all, steadily growing even through the pit of 2009.  It was the first Soviet bloc transition nation to come out of its transition recession, with a reasonably functioning parliamentary democracy, and it has outperformed all the rest economically.  In 2007, its president, Lech Kaczynski of the conservative Law and Justice Party, signed the Lisbon Treaty, which allows the EU to enforce judicial independence and other features of western democracy.  Later he would die in a plane crash in Russia, which led to his twin brother, the party’s current leader to formulate conspiracy theories that Russia was behind the crash.  A souring of attitudes came over the party as it went into a period out of power.  But Poland would become one of the most respected members of the EU, with a former president, Donald Tusk, now an EU leader.

On returning to power the Law and Justice party has followed a new track, obsessed by conspiracy theories, it has turned against Russians, Muslims, and Jews, but loves Donald Trump as well as the also neo-authoritarian regime of Victor Orban in Hungary (who is pro-Russia in contrast with the Poles).  Both now thumb their noses at the EU and its rules.  The latest for Poland is a new law that allows the government to remove half the judges and otherwise take firm control of the judicial system in a way violating Section 7 of the Lisbon Treaty.  The EU has formally condemned this move under the treaty, with tis setting up a possible loss of voting rights in the EU for Poland.  But the government seems not to care and is more committed to pursuing its nationalistic and authoritarian policies.

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Black Mirror Big Data Becomes Big Brother In China

Black Mirror Big Data Becomes Big Brother In China

And maybe coming soon to the US as well, enough to make Orwell sit up and take notice.

The first show of the 2016 season of the sci fi TV show, “Black Mirror,” called “Nosedive,” showed a future society where people have overall social scores (1-5) that are constantly being changed based on what they do and who they interact with and how.  Access to many things is based on one’s rating.  The female lead has a middling score and wants to raise it by attending wedding of friend with higher rating,  Her efforts to do so lead her to do things that make her rating fall, which then leads it to nosedive as others downrate her and dump her,with her ending up in prison.  While not quite that far gone, a system like this seems to be emerging in China, including the phenomenon of people dumping others whose social rating is falling, thus putting them into such a nosedive.  However, the scores are 350-950, resembling FICO financial ratings used initially by mortgage lenders in the US.

The emerging system is described in a recent Wired article by Mara Hvistendahl (probably Norwegian or Danish) who is currently living in China and has a low rating she has been trying to raise as she is shut out of buying various things due to it,  I suspect part of her low rating is because she is a foreigner, which she never mentions as a possible reason, but her description of how the system works and is being developed jointly by the Chinese government in conjunction with Alibaba through its Alipay system, particularly its Zhima “credit scoring system.”  It was initially a commercial system based on what people buy, but using big data goes much further to rate more broadly how people behave and with whom.  Thus a journalist who reported on corruption now has a low rating and cannot do many things.  Tyler Cowen has a link to this in his assorted links for Tuesday the 19th on Marginal Revolution, but I am having trouble linking either to either. (Dan here…fixed link)

Curiously in yesterday’s “China Watch,” a pro-Chinese government monthly newspaper that comes with the Washington Post, bragged about parts of this system in two articles.  One entitled “Alibaba credit scorer looks past deposits” reports on how its advanced “risk control” system is bringing in insurance companies  to help businesses avoid not getting paid.  The other, “Recruiters Switch On To Social Media,” reports how businesses search for possible employees by looking at their social networks on social media..  The benefits to those who might gain are stressed, but no possible downsides or criticism are mentioned.

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Corporatizatizing The All-Administrative University

Corporatizatizing The All-Administrative University

One of the few good things that appears to have happened in the conference committee on the generally awful impending GOP tax bill is that the hits students were going to take have been eliminated.  However, even without that additional burden, college students face costs that are far higher than any other nation and have been rising above inflation rates for decades.  While` students in Denmark actually get paid, costs are closing on $70,000 per year at the most expensive US institutions, with public schools having costs rising more rapidly than in the privates over the last decade, as states have cut public support in the wake of the revenue shortfalls that came with the Great Recession.  This is not likely to be reversed in many states as favorable views of universities among Republicans have fallen from nearly 60% to about 30% (with little change among Dems, still between 55 and 60%).

I would like to focus on a long-running trend that has been known for some time but somehow keeps disappearing from view.  This trend was best presented in the ever more relevant 2011 book by Johns Hopkins poli sci prof, Benjamin Ginsberg, The Fall of the Faculty: The Rise of the All-Administrative University and Why it Matters.  This rise of an all-powerful professional administration is tied to a corporatization of American academia.  From 1975 to 2005 while student populations rose 56%, faculty increased by 51%, administrators rose 85%, and their professional staffs rose 240%.  Around 2005 the total numbers of admins and staff surpassed that of faculty, with that trend simply continuing.  Admin salaries have risen faster than the other categories. On top of that, even as faculty numbers and salaries have not kept pace, there has also  been the weakening of status and pay arising  from the ongoing steady shift from tenure track faculty to temporary adjuncts who have risen   from 22% of faculty in 1970 to about 50% in 2017.

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The End Of The “Islamic State.”

The End Of The “Islamic State.”

There are two aspects of this debate, one about the term, “Islamic State,” and the other about the its application. So, until about a month ago the entity calling itself ” al-Dawla al Islamiyya fi al-Iraq wa al Sham(s),” was claiming to be the most important Muslim political entity in the world, the center of its “Caliphate” which claimed to be the only legitimate and supreme ruler and polltical state for the entire Islamic/Muslim world. As of this moment it remains unclear what the status of the self-proclaimed al-Khalifa, Abu-Bakr al Baghdadi. Rumors have had him dead while others say he remains alive and in charge of the remnants of his group.

Regarding its real world actual existence, well, I am posting this because about a month ago this group lost control of the last good sized town that it controlled, Abu Kamal, reported by the seriously ignorant western media as “Bukamel,” about 40,000 in population, a town on the Euphrates River just over the border from Iraq on the Syrian side.  Apparently it now controls no town or city of any size, although supposedly it continues to operate in rural desert areas along the Syria/Iraq border. But as an entity that rules any sort of meaningful government as a “state,” well, it has ceased to exist  as that as of the takeover of Abu Kamal by Syrian state forces backed by both Russia and  Iran as well as the US to a lesser degree, and has returned to its earlier roots as a guerrilla rebel movement, not a status as a “state,” according to any serious definition of that term.

The second part of this involves mainstream western media.  Somehow somebody in control of these things decided and enforced that what al-Dawla al Islamiyya fi al-Iraq wa al Sham(s) would be known as “officially” in western mainstream media (to be specific the “papers of record,” the New York Times and the Washington Post), would be the seriously misleading and ideologically/theocratically inaccurate term, “the Islamic State.”

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Is Bitcoin A Speculative Bubble?

Is Bitcoin A Speculative Bubble?

 There are at least two definitions of a speculative bubble.  The first, and most widely accepted, is that it involves a price of an asset that rises substantially above its fundamental and then falls back towards that fundamental.  The other, not necessarily all that clearly distinguishable from the former, involves an asset price that rises due to people buying due to an expectation that they will get a capital gain from its expected future price rise, with this then happening due to a self-fulfilling prophecy, with eventually the price falling sharply, with this not necessarily involving a fall towards a fundamental because the asset may have no fundamental at all.

I note before proceeding futher that there is an enormous debate and literature on identifying fundamentals at all, even when they might theoretically exist.  There is a serious body of opinion dating from Flood and Garber a quarter of a century ago that one cannot identify them econometrically (“Tulipmania”).  This has been shown to be false by me and many others in various papers, including particularly on closed-end funds where the net asset value of the fund minus taxes and fees is a fundamental, and when those soar to twice the value of the underlying net asset value, well, we are looking at a bubble. The lit is there and decisive.  I asked Garber to comment on a paper presented a long time ago at a conference on this point, but the chicken shit did not show up to admit that he was just plain wrong.  He had no legitimate excuse for his absence.

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Tolerance And Terrorism In Saudi Arabia

Tolerance And Terrorism In Saudi Arabia

On the one hand this past week, Thomas Friedman at the New York Times has written a praising column about Crown Prince Muhammed bin Salman (MbS). He is going to bring a new “wave of tolerance” into Saudi Arabia, along with more generally modernizing it. This claim is not totally without substance given his setting up for women to drive starting next June as well as letting them go to sports events with men and also curbing some of the excesses of the Mutaween, the religious police. It is not clear what further liberalizations are in order, but Friedman assures they are coming. A newly tolerant Saudi Arabia is on our doorstep, whoopee!

OTOH, it has since been announced that MbS is overseeing a rewriting of the criminal code of the Kingdom of Saudi Arabia (KSA). A major part of this rewriting is to help the government combat terrorism, with the death penalty available for helping to aid in this. Just as we all oppose corruption, which MbS fought by arresting 201 people, many of whom also seem to have been potential political rivals or critics, we all oppose terrorism. But just as with corruption, terrorism can be stretched to mean many things. And indeed, it turns out that one of the items appearing in the new criminal code is that criticizing the king is an act of terrorism, punishable by death. This is how one has tolerance while fighting terrorism at the same time in the new Saudi Arabia, whoopee!

Barkley Rosser

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A Race To Suppress Academic Freedom?

A Race To Suppress Academic Freedom?

The race is between the two nations competing for global dominance, the US and China.  This post is triggered by an unnamed editorial in today’s Washington Post (probably authored by Fred Hiatt) criticizing China for imposing ideological limits on Chinese universities.  Since the recent party congress, 40 universities have set up centers for studyiing Xi Jinping Thought.  14 universities have come under attack for being “ideologically weak.”  Joint operations between US and Chinese universities must appoint a party secretary as a vice chancellor.  There have also been restrictions on the internet and other matters.  Without doubt, putting restrictions on higher education will make it harder for China to move into a position of full global leadership.

Of course, the WaPo editorial did not notice trends in US academia that also may lead to suppression of research activity and threaten the current leading position of US higher ed in the world, although there have been reports and columns commenting on these trends.  Among them are the push for political correctness coming from students, but probably more important is the assault on higher ed coming from the Trump administration.  This is seen in the attack on tax breaks for students but also the push to distort funding for research on certain topics. While not directly on higher ed, probably the most damaging has been the attack on science in government agencies, especially the EPA, with such nonsense as banning scientists who have received funding from the agencies on their scientific advisory boards, even as those receiving funding from corporations at odds with goals of these agencies are allowed to be on those boards.

Really, it looks that the two most powerful nations on the planet are having a race to suppress academic freedom and suppress the free development of knowledge in this world at a time when we need more of that.

Barkley Rosser

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Proposing A Judicial Coup Via A Tax Bill

Proposing A Judicial Coup Via A Tax Bill

On today’s Washington Post editorial page in a column entitled “Packing the courts like a turducken” (a deboned duck within a deboned chicken within a deboned turkey, or something like that, all for Thanksgiving, thank you), Ronald A. Klain not only reports on the actual push to pack courts with lots of young, incompetent extremists that is going on after Congress sat on judicial nominees by Obama in recent years, but also a proposal coming from a co-founder of the Federalist Society, Steven Calabresi.  He both wants to expand the judiciary by 50% and have them all appointed in the next year, but to  replace the 158 administrative law judges with lifetime appointments by the president.  The latter are currently only appointed for one term and are civil service personnel passing on issues dealing with such agencies as the EPA and the SEC.

Most particularly, he suggests that this be packed into the current tax bill, a true turducken. The only good thing about this is that it does not look like anybody in Congress is pushing it.  But if they did, this would put the US even more in the same category as nations like Turkey, Russia, and Hungary where executive authorities move vigorously to take direct control over formerly independent judiciaries.  It is bad enough the degree to which this sort of thing is actually happening as it is.

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