2011 February 27 Sunday
Egypt Faces Deeper Poverty?

How is Egypt going to do post-Mubarak? My guess: Not good. As Jeff Rubin points out, Egypt's regime and people can not afford the high priced food that comes with a rising world population and Peak Oil:

Yet the population of Egypt has tripled to 80 million today from 27 million in the early 1960s. While the birth rate for an average Egyptian woman has fallen from six children to just over three, it still fuels more than 2 per cent annual growth in the population. At this pace, Egypt’s population will double to 160 million by 2050.

Aside, I recommend Rubin's book Why Your World Is About to Get a Whole Lot Smaller: Oil and the End of Globalization. The title's claim exceeds what I expect will happen. Peak Oil will reduce world trade. But many goods (e.g. semiconductors, medicines) are high value, low weight and therefore not so vulnerable to rising shipping costs. But Rubin is correct in pointing to other goods (e.g. steel, furniture) that will get made much closer to customers as a result of Peak Oil.

With 80 million people Egypt is already importing 60% of its grain.

But the country is already importing 40 per cent of its food supply and 60% of its grain. Even a brutally repressive regime like Hosni Mubarak’s still spent 7% of the country’s GDP on food and energy subsidies. Can a replacement regime afford to spend more?

Um, no, it can not afford to spend more. Why? Egypt is in the process of transitioning from an oil-exporting to an oil-importing nation. So where it used to earn money from oil exports to spend on food imports for now on it will have to spend to import oil and food without sufficient export revenues needed to pay for them.

Based on the ELM, we have concluded that given a production decline in an oil-exporting country, the Net Export Decline (NED) rate will exceed the production-decline rate and the NED rate will accelerate with time - unless the exporting country cuts its oil consumption at the same rate as, or at a faster rate than, the rate of decline in production. Furthermore, the bulk of post-peak Cumulative Net Exports (CNE) tends to be shipped early in the NED period.

After hitting a production peak in 1995, Egypt became a classic case of a rapid NED, as its NED rate exceeded its production-decline rate and accelerated with time. Furthermore, only four years into this NED, Egypt had shipped more than 50 percent of its post-peak CNE.

The political instability in Egypt was helped along by the food and oil picture. Hungry poor people are not happy citizens. See more on what happens when oil production peaks in an oil exporting nation. In a nutshell: exports drop much more rapidly than production due to rising internal consumption.

Then there are food prices. People in poor nations are being hard hit by record high (at least in recent decades) grain prices.

In January, global food prices hit their highest point in the 20 years since the United Nations first started tracking the cost of food. The spike in prices has pushed about 44 million people into extreme poverty since June, said Zoellick, speaking prior to a meeting of G-20 finance ministers in Paris Feb. 18-19.

"It is poor people who are now facing incredible pressure to feed themselves and their families -- as more than half of a poor family's income goes just to buy basic foodstuffs," he said Tuesday. "Global food prices are now at dangerous levels."

The U.N.'s Food and Agriculture Organization estimated that the cost of food -- captured by its food price index -- went up 3.4 percent in January compared to December 2010, and is almost 30 percent higher than it was a year ago.

A grain price spike preceded the North African revolutions. Coincidence?

This month, the U.N. Food and Agricultural Organization (FAO) reported that its food price index jumped 32 percent in the second half of 2010 -- surpassing the previous record, set in the early summer of 2008, when deadly clashes over food broke out around the world, from Haiti to Somalia.

An FAO report noted that "recent bouts of extreme price volatility in global agricultural markets portend rising and more frequent threats to world food security."

Food price rises do not seem steep to Westerners because raw materials make up a small percentage of your cost of a loaf or bread or box of cereal. But for extremely poor people cooking from raw materials a 30% rise in the prices for some grain is a disaster. How poor are Egyptians? I find one source says half the Egyptian population lives on $2 or less per dayThough another source says only 18% of Egyptians live on $2 per day. Even at 18% that's a huge number of people who can not handle large food price spikes. If a future Egyptian government can not afford to subsidize food imports (faced with high fuel bills and an even larger population to feed) then another revolution and even more extreme poverty seem a real possibility.

By Randall Parker 2011 February 27 07:11 PM  Mideast Poverty
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Robert Gates Admits Massive US Mistake In Middle East

Speaking to West Point students in a political science class Defense Secretary Robert Gates agreed that the US should avoid getting the US military into big land wars.

“Any future defense secretary who advises the president to again send a big American land army into Asia or into the Middle East or Africa should 'have his head examined,' as General [Douglas] MacArthur so delicately put it.”

Sanity sounds good to me.

Where have we heard this wisdom before? Princess Bride. Vizzini on the same topic:

Vizzini: You only think I guessed wrong! That's what's so funny! I switched glasses when your back was turned! Ha ha! You fool! You fell victim to one of the classic blunders - The most famous of which is "never get involved in a land war in Asia" - but only slightly less well-known is this: "Never go against a Sicilian when death is on the line"! Ha ha ha ha ha ha ha! Ha ha ha ha ha ha ha! Ha ha ha...

By Randall Parker 2011 February 27 04:02 PM  Politics Grand Strategy
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2011 February 26 Saturday
Oil Price Spikes And Recessions In The 2010s

Imagine the next recession happens before we are even half way recovered from the most recent recession. The US government will go into the next recession already running big deficits. The USG is currently running a fiscal deficit of about 10% of GDP. Tax revenues will plunge. The US government will be unable to use fiscal spending as a compensating stimulus. In fact, the US government will cut spending in the next recession if it comes at any time in the next few years. States and cities will go into the next recession with huge unfunded pensions for their employees and big debts on their underfunded unemployment programs.

With all this in mind let us take a look at the latest oil price spike. Jeff Rubin points out that prices had already spiked before protesters took to the streets in Cairo.

What’s easy to lose sight of in the chaos sweeping through the Middle East is where oil prices were trading before it began. The Brent futures contract, the world’s new benchmark oil price, had already broken $100 (U.S.) a barrel before protesters in Cairo started sweeping into Tahrir Square and demanding Hosni Mubarak’s head.

Rubin, author of Why Your World Is About to Get a Whole Lot Smaller: Oil and the End of Globalization (which I've read and recommend), sees these prices as noteworthy because of when they are happening versus the economic cycle. Says Rubin "These are the kind of prices that one might expect to encounter at the end of an economic cycle, not at the beginning of one." For some context see this graph of oil price spikes and recessions starting from the early 1970s. The only exception to the pattern of price spikes and recessions was the early 1980s recession caused by then Fed chairman Paul Volcker as he tightened credit to squeeze inflation out of the US economy. But that inflation was in part due to earlier oil price spikes.

UCSD economics professor James Hamilton, who has done a lot of work modeling the effects of oil prices on economies, thinks we are okay for avoiding a recession as long as oil prices stay below $130 per barrel.

The particular dynamic model from which the above Brookings figure came builds in quite strong nonlinearities and threshold effects. Interestingly, according to that specification, one wouldn't begin to anticipate significant effects on U.S. GDP until the price of oil got above about $130 a barrel, or until the second half of this year. Prior to that, according to that specification, we're still ok.

So, hey, we might still have 6 more months of economic expansion ahead of us barring another revolution in the Middle East. Such is life during the Peak Oil period. It gets even worse once world oil production starts declining every year.

So what about another revolution in the Middle East? On the Foreign Policy blog The Oil And The Glory Steve LeVine points to a Cameron Hanover note on the speed ot the spread of protests against Middle Eastern governments.

OPEC, namely Saudi Arabia, pledged to make up any oil lost from Libya, which exports around 1.6 million barrels of oil per day. Of course, that only works as long as Saudi Arabia avoids contagion. And we have not read of contagion ever spreading with greater speed than has been seen these last few weeks. The spread has rivaled the spread of the Black Plague 650 years ago. That very speed may be the factor that has oil markets most on edge.

My guess is that the violence in Libya is cooling some of the revolutionary ardor of the Arab middle classes for regime overthrow. But if the Saudi Shiites take to the streets then you better radically cut your living standard and prepare for a full blown economic depression. An even partial halt of Saudi oil flow would cause a world depression with banks failing left and right, sovereign debt crises, bankrupt states, massive layoffs, and governments powerless to lessen the blow.

The "Export Land Model" (more below) rears its ugly head as major media reporters notice the rapid growth in Saudi domestic oil consumption. Zero growth in Saudi production means declining exports as more oil gets consumed internally that used to be available for export.

The world currently is awash in oil, and Libya's missing volumes won't halt anyone's factory or vehicle. But if the oil flow becomes cut off from additional petro-states, what will happen? At Fortune, Colin Barr points out that Saudi's long-term rising consumption raises questions about its capacity for rescuing the world economy down the road.

According to the Export Land Model our problem with oil is made far worse by rapidly rising consumption inside of oil exporting states. So, for example, on flat production Saudi oil exports declined in December 2010.

Rising costs of oil production have become the bottleneck for Western economic growth. Rising Asian demand and rising Export Land demand make this problem much worse. The world is starting to look more like a zero sum game. We must prepare for this in our personal decision-making. Due to flat and eventually declining oil production the recessions of the 2010s will be much more painful than what we've seen so far. My advice: make career and lifestyle decisions to insulate you from what's coming. Want to buy a car? Make it a hybrid and make it small. Want to move? Move closer to work. Or switch to a job that is both closer to home and more likely to survive oil price spikes.

Update: Nomura analysts project that if all oil production in Libya and Algeria go offline then oil will spike to $220 per barrel. Our livelihoods and living standards depend on political stability in Arab dictatorships. Political stability would give us more time to prepare for Peak Oil. But I do not expect most people or governments prepare.

By Randall Parker 2011 February 26 02:05 PM  Economics Energy
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2011 February 25 Friday
Did Barack Obama Lose Hamid Karzai?

Themes in American foreign policy debates seem to recur with different names. "Who lost China?" has morphed into "Who lost our influence on some corrupt leader we put into power in a tribal backwater?". Of course, for the sake of political correctness the question gets asked in a way that is less revealing. Writing in Foreign Policy Ahmed Rashid has an essay How Obama Lost Karzai.

Ironically, 2010 was supposed to be a new "year one" for the U.S.-led war in Afghanistan, when the Americans, after years of neglecting the country in favor of Iraq, finally invested the resources necessary to defeat the Taliban and rebuild the country. Instead, things got worse. Last year saw the highest death toll of U.S.-led coalition forces since the beginning of the war, increasing civilian casualties, and the spread of the Taliban insurgency, once contained in south and east Afghanistan, into the north and west as well.

Did Obama lose Afghanistan? Or (much more likely) was it never ours to lose? Also, how did the Taliban spread into areas populated by other tribal groupings? Northern Afghanistan isn't Pashtun and the people in the north do not even belong in the same country as the Pashtun.

At the heart of the failure, both a cause and consequence of it, is the tattered U.S. relationship with Karzai, an alliance that has cost the United States more than $330 billion and nearly 1,400 soldiers' lives, but is now at the lowest ebb of its nearly decade-long history.

One cause of US foreign policy failure in Afghanistan: consanguineous marriage. Lots of illiterate cousins marrying each other with no loyalty to higher level political entities.

What's sad for the Republic: That we can waste a few hundred billion dollars and 1,400 lives (and probably 10 times or more that many with permanent disabilities, including brain damage from IEDs) over 10 years and not have the continuation of the war become a major issue of policy debate.

U.S. President Barack Obama and his administration plainly do not trust the Afghan leader, or even much like him. Apparently convinced that cleaning up the Afghan government is more important to the country's stability than Karzai himself, U.S. authorities have mounted increasingly confrontational anti-corruption investigations of his inner circle.

Okay, Barack Obama does not have great intuitions about handling other people. He is where he is mostly because of the eagerness of others to project their fantasies on him. But America was never going to achieve a great transformation of Afghanistan in the first place. So Obama's mistakes just worsen a naturally bad situation.

From the Afghan president's perspective, Washington treats him with a mixture of insult and confusion. During Obama's December visit to U.S. troops at Bagram air base outside Kabul, bad weather prevented him from flying by helicopter to the nearby capital. Rather than wait for the weather to clear -- a matter of hours perhaps -- Obama left without seeing Karzai. It was a snub that Afghans will not forget. A few days later, Vice President Joe Biden said that U.S. forces would be out of Afghanistan by 2014 come hell or high water -- and then told Karzai in mid-January that U.S. forces would stay beyond the deadline.

A serious US foreign policy would not have Joe Biden involved in its formulation.

Saleem H. Ali says we should accept that the Pashtun are a bunch of tribal fundamentalist Muslims and repartition Pakistan and Afghanistan to create a region between them where the nutters can practice their own form of governance. See his essay The Islamic Republic of Talibanistan.

The fact is that the Taliban and other Islamist elements are popular in the region out of which they operate, the Pashtun tribal belt between Afghanistan and Pakistan. This has always been an utterly conservative locale where the local population has generally favored Islamic fundamentalism. Even going back to the 1930s, Waziristan's rallying flag against the British was a simple white calligraphic "Allah-Akbar" (God is Great) on red fabric.

Give the Pashtuns their own sandbox to play in. Makes sense to me.

Although the West and its allies in Pakistan and Afghanistan have been terrified by the specter of a second Islamic republic, there is a way to mitigate the threat: the creation of a semiautonomous region where Islamists can exercise their draconian system of law -- if that is what the people agree to impose upon themselves. Just as the creation of Pakistan involved a migration, or hijrah, the radical elements in both countries who yearn for an Islamic emirate can be allowed to migrate to this hinterland and help build their new political order.

As I've previously argued, our national ideology blinds us to the aspects of human nature one needs to understand to handle a place like Afghanistan.

One needs an enormous cynicism about human nature to handle a place like Afghanistan. Our own national ideology of multi-cultural democracy blinds officers and civilian policymakers alike from the mental model of human nature needed to do deals in Afghanistan.

By Randall Parker 2011 February 25 05:09 PM  MidEast Afghanistan
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Modest Proposal: Monetize Revolutions With Advertisements

Watching any video from Libya as the revolution progresses? Did you watch video from Cairo? Something was missing: Advertisements. Marketers have missed revolutions as settings for pitching their wares.

Picture street scenes in Cairo and Tripoli with big decals added to tanks by paid marketing insurgents. Protester could be given free signs where they could write their message on the top and where the bottom would say "Pepsi for the new generation" or "Sprite for freedom". Or how about "Break on thru with Coke"? These signs could also be placed on barricades put up by protesters , and on the walls of buildings overlooking key protest squares. When the cameras train on them the world will be reminded to log onto Facebook or tweet their reactions to bloody scenes.

Also, security ads (e.g. gun brands) could easily go on helmets and the sides of tanks. The tanks in urban settings do not need camouflage. Huge noisy tanks can't sneak around cities. So why not carry advertisements? A slide show of revolutionary street scenes, eagerly watched by readers, could include protestors wearing CAT, John Deere, Ford or Toyota hats. In daytime scenes major figures in street protests could be given Oakley sunglasses to wear for free. And why shouldn't Coke or Pepsi smuggle in soda to distribute in Tahrir Square?

Many corrupt dictatorships have monopolies on an assortment of goods and services. When a dictatorship is going to fall previously excluded brands can use the very memorable experiences street fervor to impress upon rebels and protesters that some brand of cola or blue jeans or sunglasses stands with them against the ancien regime. So the advertisements would work on both the local population and international spectators.

Update: Question: What are the best brands to advertise in a revolution? Why?

By Randall Parker 2011 February 25 12:42 PM  Media Ubiquity
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2011 February 22 Tuesday
Civil War Erupts Over Libyan Leader's Last Name

How can the Libyans be expected to be ruled by one guy when news media from around the world call him many different names? The Wall Street Journal calls the clown Gadhafi.

In Libya, Col. Moammar Gadhafi's army shot at pro-democracy protesters in the capital city of Tripoli, according to witness reports.

Putting on airs and acting all pretentious The NY Times editors call him el-Qaddafi. Just using the Q wasn't good enough. Using the Q without a u after it wasn't good enough. They had to do the "el-" dash in front of his name.

Col. Muammar el-Qaddafi of Libya vowed on Tuesday that he would “fight on to the last drop of my blood” and die a “martyr.” We have no doubt that what he really meant is that he will butcher and martyr his own people in his desperation to hold on to power. He must be condemned and punished by the international community.

Even in this coastal town, more than 900 miles from Libya's capital and in an area that has slipped well beyond the government's control, some still support Gaddafi, who has ruled this country for 41 years.

Reuters banded with the Washington Post in calling the murdering buffoon Gaddafi.

Pressure mounted on the White House on Tuesday to intervene to stop Muammar Gaddafi's bloody crackdown on democracy protests as a lawmaker close to President Barack Obama urged oil firms to halt work in Libya.

Now we come to the K spellings. Expatica calls him Kadhafi.

German Chancellor Angela Merkel described a televised address Tuesday by Libya's Moamer Kadhafi as "very scary" and said Berlin would consider sanctions unless he halted a crackdown on protestors.

Agence France-Presse (AFP) moves the h into the first syllable.

A leading academic at the university who knew Moamer Khadafi's son when he studied there said he was "deeply disturbed" by the former student's condemnation of anti-regime protests.

But the splittists at the San Francisco Chronicle insist on calling for the overthrow of Khadafy with a "y".

Moammar Khadafy, despot of Libya for the past 42 years, needs to go. As the Arab spring of revolutions rolls on, it is becoming clear that he will go. But how many of his people will he take with him?

I think this has to be a big inside joke among newspaper reporters and editors: See how many names can we call Ghadafi/Gadhafi/Khadafy/Qaddafi while posing as deadly serious. ABC News counted 112 last names used for KQGaddhafiy.

By Randall Parker 2011 February 22 10:29 PM  Media Critique
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Chateau: Cultural Products As Emotional Pornography

Over at Le Chateau de Roissy a commenter makes the point that just as pornographic pictures make some males less interested in real life females cultural products for women serve as emotional pornography that makes them less willing to form relationships with the men within their reach.

But thankfully the world is blessed with the wit and wisdom — and the sadism to tell it like it is — of the Chateau. So you come here for the full truth, because you think you can handle it. And the truth is that modern women have been gluttonously absorbing their own version of expectation-raising and niceguy-desensitizing porn…

Emotional pornography.

A commenter writes:

Women do have problems with false expectations of romance. Emotional pornography has really screwed with their heads.

Think Lifetime channel movies.

Bingo. Biologically, women don’t get off on visual porn the way men do. But that doesn’t mean they don’t have their own outlets for electrifying the beaver, or that they don’t avail themselves of these female-centric outlets with the same gusto that men do of theirs.

Let’s get right to it. Women masturbate to words. To stories. Stories as told in movies, books and TV. These stories share common themes, often featuring the hard-to-get, aloof alpha male preselected by tons of attractive women, and the maladroit beta male to play the foil. The alpha male in women’s fantasies is outsized. His kind exists in extraordinarily tiny numbers in the real world. Which makes his grudgingly surrendered love that much the sweeter.

A few years back (can't remember where) I read a version of this argument applied to Japanese women who in large numbers have lost interest in marrying the kinds of Japanese men who are within their range to attract. I think this is a real phenomenon. They've been fed books and media images that raise their expectations for men that exceed the sorts of men they can attract. Result? Birth dearth. At the same time the men are spending many hours playing video games, gambling with pachinko, or reading cartoon fantasies involving half-Japanese heroes (really).

We are no longer in what evolutionary psychologists call our environment of evolutionary adaptedness (EEA). Both males and females have cognitive processes selected for to make them reproductively fit in an EEA. But now we see pictures, videos, books that send us signals that make us maladapted.

Getting messed up by porn or Lifetime movies? Just say no.

By Randall Parker 2011 February 22 07:32 PM  Human Nature Mating
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2011 February 20 Sunday
Americans Not Saving Enough For Retirement

Odds are you probably are not saving enough for retirement and will have to work into your late 60s and beyond. (very worth a read)

The median household headed by a person aged 60 to 62 with a 401(k) account has less than one-quarter of what is needed in that account to maintain its standard of living in retirement, according to data compiled by the Federal Reserve and analyzed by the Center for Retirement Research at Boston College for The Wall Street Journal. Even counting Social Security and any pensions or other savings, most 401(k) participants appear to have insufficient savings. Data from other sources also show big gaps between savings and what people need, and the financial crisis has made things worse.

A typical couple needs about $650k in a 401(k) going into retirement to maintain something close to their working living standard. The article includes anecdotal reports of couples shocked to find in their early 60s that they have to work five or ten more years. What's worse? People who retire in their 60s without doing due diligence to figure out how long their cash will last. They'll be living in hovels and eating really cheap food by the time they die.

Put away 15% of your salary per year. Even this estimate sounds too low to me.

Vanguard Group, one of the biggest providers of 401 (k) plans, has changed its advice on how much people should save. Vanguard long advised people to put 9% to 12% of their salaries—including the employer contribution—in their 401(k) plans. The current median amount that people contribute is 9%, counting the employer contribution, Vanguard says.

Recently, Vanguard has begun urging people to contribute 12% to 15%, including the employer contribution, because of the stock market's weak returns and uncertainty about the future of Social Security and Medicare.

Note that Vanguard sees uncertainty around the future of Social Security and Medicare. Well, Barack Obama just proposed a budget with a $1.6 trillion deficit. Uncertainty? No way. I am quite certain that Social Security and Medicare benefits will be cut, along with many other programs. The US government can not pursue fiscal insanity indefinitely. Eventually the market will discipline the USG and force Congress and likely the next US president to cut, cut, cut. California and Ireland serve as models of what is to come. Chop, chop, chop.

Your real savings needs exceed even what this Wall Street Journal reports because the stock market is not going to provide the kinds of returns that it has for most of the post-WWII period. Combine the arguments in Tyler Cowen's arguments for why raising living standards has gotten harder (see The Great Stagnation: How America Ate All The Low-Hanging Fruit of Modern History,Got Sick, and Will (Eventually) Feel Better) with the approach of Peak Oil and America's declining demographics and what do you get? The US economy (as well as other Western economies) looks more likely to contract than grow over the next 15 years. Think technology is going to save us? American technology companies generate very few jobs for American workers.

By Randall Parker 2011 February 20 04:15 PM  Economics Retirement
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Foreign Mercenaries Helping Gaddafi Hold Tripoli

Mercs are terrorizing the people of Tripoli as Gadhafi loses control of large swathes of Libya. He's a goner. If he survives in exile he's going to have to consolidate his last names or fade into obscurity.

Human Rights Watch said it had confirmed 62 deaths in two hospitals after a rampage on Monday night, when witnesses said groups of heavily armed militiamen and mercenaries from other African countries cruised the streets in pickup trucks, spraying crowds with machine-gun fire.

The eastern half of Libya's coastal cities are in the hands of rebels. So apparently Kadhafi did not import enough foreign soldiers to hold all cities. That mistake will cost him fatally.

Colonel Qaddafi has lashed out with a level of violence unseen in either of the other uprisings, partly by importing foreigners without ties to the Libyan people. His four decades of idiosyncratic one-man rule have left the country without any national institutions — not even a unified or disciplined military — that could tame his retribution or provide the framework for a transitional government.

The leadership of Bahrain is using imported labor on an even bigger scale to try to make local Shia Muslims a minority.

Meanwhile, the the battle over Khadafy's last name shows no sign of abating with WikiLeaks cables showing the US State Department embracing Qadhafi as their preferred spelling.

As the Qaddafi clan conducts a bloody struggle to hold onto power in Libya, cables obtained by WikiLeaks offer a vivid account of the lavish spending, rampant nepotism and bitter rivalries that have defined what a 2006 cable called “Qadhafi Incorporated,” using the State Department’s preference from the multiple spellings for Libya’s troubled first family.

Why doesn't the New York Times follow the State Department's cue? Seriously, does this divergence signal a split between the Gray Lady and Foggy Bottom over the future direction of the American empire?

By Randall Parker 2011 February 20 03:49 PM  MidEast Insurgencies
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2011 February 18 Friday
US Government Interest Payments Set To Soar

US federal interest payments per person are set to triple.

Interest payments on the national debt will quadruple in the next decade and every man, woman and child in the United States will be paying more than $2,500 a year to cover for the nation's past profligacy, according to figures in President Obama's new budget plan.

If you are among the ranks of net taxpayers (paying the government more than you get back) then your cost for servicing the debt will be much higher than $2500 per year. Higher earners will have to pay for most of the debt interest. Expect higher taxes.

That $2,500 of interest per resident (not just citizens) is most likely on the low side. Mainstream economic models of future US economic growth are still too optimistic. There's still the assumption of a return of "normal" growth rates. It will take some more years of economic growth that is below the growth rate of the last hundred years before economists fully accept that fundamentals have changed in ways that lower potential growth rates. So disastrous projections of future government deficits and interest payments still are unrealistically optimistic.

Ken Rogoff gets that we are not growing fast enough. Without high economic growth governments can not pay what they've promised their growing elderly populations.

"We're running a gigantic deficit, and we're not growing very fast," said Kenneth Rogoff, an economics professor at Harvard University and former chief economist at the International Monetary Fund. "We're on a dramatically unsustainable path."

That we are in an extended period of slow growth is beginning to sink in with some economists. I encourage you to read Tyler Cowen's new Kindle book (a mere $4) The Great Stagnation: How America Ate All The Low-Hanging Fruit of Modern History,Got Sick, and Will (Eventually) Feel Better. Tyler says the rate of innovation is too slow to enable fast economic growth. The fundamental innovations (e.g. the discovery of the transistor) are not happening often enough. So too much of our innovations come from refining technologies. There are diminishing rates of return from refinement. Economic growth suffers.

I think our prospects for economic growth are even worse than Tyler foresees. Our demographics are deteriorating. On top of that, I expect Peak Oil will cause an extended period of outright economic contraction. Replace economic growth with contraction and government deficits balloon out of sight and interest payments soar. That's the prospect we face.

Much like Ireland, Greece, and other basket case European countries the US faces a considerable risk of hitting a breaking point where the accumulated debt causes investors to dump sovereign debt as too risky. Then a vicious cycle will set in where interest rates soar, making debt service cost more than government services. The US government will be tempted to use hyperinflation to inflate away the debt mountain.

Update: How can we reach the disaster point? What would do it: Another recession while the US deficit is already huge going in. That's not as far off as it might seem. A big oil price spike will push the US economy back into recession. We are closer to recession-causing high oil prices than it seems when watching US financial news reports on oil prices. The widely quoted West Texas Intermediate crude oil price in Cushing Oklahoma is much lower than the average global price of oil.

The spread between West Texas Intermediate crude oil for delivery at Cushing, Oklahoma and comparable oil for delivery almost anywhere else in the world has surged to record levels. The discount of WTI to Brent hit a previously unfathomable $18.50 a barrel as Brent crude traded at $103.93 per barrel, up $2.29, while NYMEX WTI traded at $85.43, up only $1.11 a barrel. (WTI has historically sold at a dollar or two premium to Brent, which is a slightly heavier and more sour blend.) Clearly there is a supply/demand imbalance at Cushing, Oklahoma not replicated elsewhere in the world, and specifically not replicated anywhere you can just put oil in a tanker and send it to China.

Developments in northern Great Plains and Canada have made Cushing prices much lower than prices on the US East and West coasts and the rest of the world.

Increased flows from Canadian tar sands and the Bakken shale fields in the northern Great Plains have sent oil flooding into Cushing, Okla., where the WTI crude contract is priced. But because pipelines are set to run into Cushing, not out, much of that oil is going into storage rather than into refineries. Oil stockpiles in Cushing hit their highest level in seven years last month.

The glut has disconnected the widely quoted WTI market from a sobering energy market reality. "Cushing isn't worth looking at," says Steve Kopits of energy forecaster Douglas Westwood in New York.

The US government (and other Western and East Asian governments) will not be able to afford fiscal stimulus in the next recession. We will go into the next recession with much higher deficits, much higher debt, and much higher unemployment rates. In the next recession governments will cut spending, not increase it.

By Randall Parker 2011 February 18 10:08 PM  Economics Sovereign Crises
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2011 February 16 Wednesday
Why Do Smart People Get Drunk More?

Dennis Mangan says drunkenness by the smartest is an escape from all the dummies in our midst.

Satoshi Kanazawa: More intelligent people are more likely to get drunk. Dr. Kanazawa has his theory about this, and I have mine: intelligent people need to escape the reality of mass stupidity.

We can't really escape the dummies because the dummies are making more babies than the smarties.

My take: Drunkenness lowers effective IQ and therefore it enables smart people to lighten their load of worries by basically joining the rest of the population in thinking simpler and fewer thoughts. So drunkenness is pretty much a temporary embrace of stupidity.

What's needed: A drug that blocks worries and negative thoughts while not reducing IQ.

By Randall Parker 2011 February 16 11:20 PM  Human Nature Cognitive Ability
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Big Banks Leveraging Up At Our Risk Again

Simon Johnson says the US government is encouraging the biggest US banks to once again over-leverage. Of course this is at our risk.

If shareholders are protected from being wiped out by the implicit too-big-to-fail guarantee, they should welcome the arrival of additional leverage as the economy improves. In fact, as the latest quarterly earnings results appear, the financial press has started to ask Goldman Sachs Group Inc. and other banks why they don’t increase their leverage even more.

Top bankers are also pressing hard for the right to increase dividend payments. That’s effectively a transfer from creditors and taxpayers tomorrow (because of the guarantee) to shareholders today.

Dimon also wants JPMorgan to become more global, especially by expanding more into emerging markets. U.S. Treasury Secretary Timothy Geithner endorsed this approach in an interview he gave to the New Republic, effectively arguing that we should want big, highly leveraged U.S. banks to make large bets on highly volatile emerging markets.

What could go wrong?

By Randall Parker 2011 February 16 11:15 PM  Economics Financial Regulation
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London Tube Bomber Trainer Freed By USA

He apparently helped US intelligence so much that he got released early.

An American jihadist who set up the terrorist training camp where the leader of the 2005 London suicide bombers learned how to manufacture explosives, has been quietly released after serving only four and a half years of a possible 70-year sentence, a Guardian investigation has learned.

The unreported sentencing of Mohammed Junaid Babar to "time served" because of what a New York judge described as "exceptional co-operation" that began even before his arrest has raised questions over whether Babar was a US informer at the time he was helping to train the ringleader of the 7 July tube and bus bombings.

Aside: We should revoke citizenship for all American jihadists? If one so fundamentally rejects what America stands for then why not make them an ex-citizen?

I'd like to know what intelligence he provided that was so valuable that it justifies not locking him up for decades. I'd also like to know why we wasn't just killed along with anyone else involved in the London 7/7 bombings.

By Randall Parker 2011 February 16 11:10 PM  Terrorists Western Response
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2011 February 15 Tuesday
Human Rights Groups Shift Focus Toward Taliban

Christopher Hitchens, still alive and thinking in spite of cancer, points to a New York Times article about how Western human rights groups in Afghanistan only now have shifted the focus of their attention away from NATO troops and toward the Taliban as human rights violators. Do human rights groups attract a disproportionate number of fools? Or are they really at war with their own civilization with the rest of the world serving as useful props?

Even in a week that concentrated all eyes on the magnificent courage and maturity of the people of Cairo, a report from Kabul began with what must surely be the most jaw-dropping opening paragraph of the year. Under the byline of the excellent Rod Nordland, the New York Times reported:

International and local human rights groups working in Afghanistan have shifted their focus toward condemning abuses committed by the Taliban insurgents, rather than those attributed to the American military and its allies.

The story went on to point out that the Taliban was culpable for "more than three-fourths of all civilian casualties" and informed us that some human-rights groups are now so concerned that they are thinking of indicting the Taliban for war crimes. "The activists' concern," Nordland went on, "would have been unheard-of a year ago," when all the outcry was directed at casualties inflicted by NATO contingents.

What took the turn of heart? A big attack in an upscale supermarket in Afghanistan. So, like, if the Taliban would start attacking Trader Joes stores would that turn all of the American Left against them? I mean, I like Trader Joes. I would prefer the Taliban find some other way to turn the American Left against them. But would attacks on TJ's do it?

The turning point, in the mind of the human rights "activists," appears to have occurred in late January, when a Taliban suicide-murderer killed at least 14 civilians in the Finest Supermarket in Kabul. Among the slain was a well-known local campaigner named Hamida Barmaki, whose husband and four small children were also killed. One wonders in what sense this was the Taliban going too far—women are killed and mutilated by them every single day in Afghanistan. Yet let the terror reach one of the upscale markets or hotels that cater to the NGO constituency in Kabul, and suddenly there is an abrupt change from moral neutrality.

Where the Left is concerned could the Taliban get away with attacking chain bookstores as long as they did not attack local independent bookstores? How would the Left come down on attacks on Starbucks? Would they get upset at attacks on Nordstroms? How about Volvo dealers? Worse to attack than BMW dealers? I'm guessing attacks on local arts and crafts shows would really make the Taliban enemies of human rights groups.

So I appeal to you readers: What could the Taliban attack that would most upset human rights groups? Use your imagination. I think these people could be manipulated by building whatever kind of store they most like right in downtown Kabul or Kandahar (to better help human rights group workers living in these towns). Then when the Taliban blow it up or shoot it up the human rights groups will turn against Muslim theocrat thugs. Sound like fun?

By Randall Parker 2011 February 15 06:08 PM  MidEast Afghanistan
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2011 February 14 Monday
Berlusconi Fights Discrimination Against Beauty

Check out this slide show of women connected to Italian prime minister Silvio Berlusconi. A few of the slides stand out: "Silvio Berlusconi has shortlisted his dental hygienist to contest crucial elections next month." Nicole Minetti is hot! If she gets elected then Italy's politics will have considerably more appeal than American politics. Can you imagine American feminists letting a woman that sexy get elected to anything? Berlusconi might make Graziana Capone into a candidate. I see Silvio's promoting attractive women into politics as a necessary counter to the feminists who resent attractive women and want to keep the attractive women down. His success stories are inspiring. He lifted up "Francesca Pascale, 25, a former TV showgirl" and helped her become a regional councillor in Naples. Berlusconi fights the good fight against those who are jealous of beauty.

Faced with the threat of prosecution in Milan for having sex with prostitutes and 17 year old girls Berlusconi is unapologetic and says he makes women feel special. Of that I have no doubt.

"Every woman that has had the opportunity to know me knows my regard for them: I have always behaved with the greatest attention and respect towards them," the billionaire businessmen said. "I have always made it so that every woman feels, how should I say, special."

Hundreds of thousands of (mostly less attractive) women protested on the streets about Berlusconi's behavior. Unfortunately, he has few overt allies in the battle to help beauties.

By Randall Parker 2011 February 14 06:36 PM  Human Nature Sexual Politics
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2011 February 13 Sunday
Rickie Lee Jones Live in Paris 1985 Last Chance Texaco

The video quality is only fair but the band is very good and she's in good form.

In London in 1980.

I saw her live once when she was going thru a rough patch, drinking what looked like whiskey between songs. Her talent was much better appreciated by musicians than by the general public even when she was releasing her early albums. Wikipedia has a detailed write-up of her career.

By Randall Parker 2011 February 13 07:24 PM  Music
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Modest Proposal: New Pyramids For Egypt

What positive things do you associate with the Egypt brand? The biggest positive is obvious: Pyramids. But the pyramids are old and in appearance a far cry from their original beauty. To boost the tourism industry after the change in government the Egyptians should build new pyramids that are replicas of how some of the existing pyramids looked.

What would be especially cool: Recreation of the Great Sphinx of Giza. There could even be 2 versions: one with the Pharoah's head another built with a lion's head since it might originally have been a lion. Or possibly it was shaped as a dog for Anubis. Each replica could be built. The cat and dog people could support their preferred version. Something 4500+ years old is today a far cry from what it originally looked like when (according to some researchers) Khafra had it built (or modified?). A high quality replica of the original would pull in lots more tourists.

By Randall Parker 2011 February 13 01:16 PM  Entertainment Great Sites
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Avoid Those With Unhealing Emotional Wounds

Do not hook up long term with someone who maintains a grudge or sustains a feeling of being emotionally wounded. This strikes me as a statement of the obvious. But

MINNEAPOLIS / ST. PAUL (02/10/2011) —People searching for fulfilling and stable romantic relationships should look for a romantic partner who recovers from conflict well. Yes, it turns out that if your romantic partner recoups well after the two of you have a spat, you reap the benefits, according to results of a new study by the University of Minnesota College of Education and Human Development's Institute of Child Development.

The research looks at how people recover or come down after a conflict with their romantic partner, said Jessica Salvatore, the lead researcher in the study "Recovering From Conflict in Romantic Relationships: A Developmental Perspective." The article is set to appear in the journal Psychological Science, and has been released online. Co-authors of the study are university researchers Sally Kuo, Ryan Steele, Jeffry Simpson and W. Andrew Collins.

The Blank Slate is predictably invoked to explain part of the findings. But do well-loved infants go on to recover from relationship fights? Or do babies with loving parents inherit genes that make their own loving feelings dampen their anger after a fight?

Results of the study also show that infant attachment security plays a role in how someone recovers from conflict.

"Having a caregiver who was more in-tune and responsive to your emotional needs as an infant predicts better conflict recovery 20 years later," Salvatore said. This means that if your caregiver is better at regulating your negative emotions as an infant, you tend to do a better job of regulating your own negative emotions in the moments following a conflict as an adult.

By Randall Parker 2011 February 13 11:45 AM  Human Nature Relationships
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Women More Averse To Individual Competition

Women are collectivists who want to work on teams where they do not compete with other team members. They are more communist by nature. You have been warned.

Men are more likely than women to seek jobs in which competition with coworkers affects pay rates, a preference that might help explain persistent pay differences between men and women, a study at the University of Chicago shows.

The study, which covered most of the nation's largest metropolitan areas, also revealed regional variation in how much women desire jobs in which competition plays a role in determining wages. In cities where local wages are generally lower, women tend to want jobs in which competition determines wages, the study showed.

"We know that women, often working at the same kind of job as men, frequently are not paid as much as men," said John List, professor of economics at UChicago and an author of the paper, "Do Competitive Work Places Deter Female Workers? A Large-Scale Natural Field Experiment on Gender Differences in Job-Entry Decisions," published by the National Bureau of Economic Research.

Men are more likely to apply for jobs where they can get paid more than other employees by outperforming them.

Some applicants were told the job paid $15 an hour. Others were told the pay was based on individual competition, with a base salary of $13.50, and a $3 bonus depending on how he or she did in comparison to other workers.

Another package offered a $12 hourly base pay with a $6 bonus if the employee outperformed other workers. Still others were told the job had a competition-based wage, but that comparisons would be based on the productivity of people working in teams.

Of the 6,779 people who responded to the ads, 2,702 applied once they knew the wage structure. Those included 1,566 women and 1,136 men. (About 20 of the applicants were actually hired.)

"When the salary potential was most dependent on competition, men were 94 percent more likely to apply than women," List said.

Women are more likely to apply when the job involves the team getting rewarded for beating other teams. Also, in markets where pay is low women are more likely to apply for jobs where individual performance determines pay. My take: Desperation causes them to overcome their aversion to competition. Necessity is a mother, or it drives a mother.

By Randall Parker 2011 February 13 11:38 AM  Human Nature Sexual Differences
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2011 February 11 Friday
Why Should A Dictator Hang Onto Power?

Why hang on when you've been in power for decades? Don't you have enough money in the bank by then to enjoy an extremely wealthy retirement? Only once you lose power will the Swiss seize your bank accounts. So staying in power protects your money.

In Switzerland, the government said it had frozen assets which possibly belonged to Mubarak. There have been unconfirmed reports he has amassed a fortune running into tens of billions of dollars.

"I can confirm that Switzerland has frozen possible assets of the former Egyptian president with immediate effect," government spokesman Lars Knuchel said, declining to specify how much money was involved.

You might ask why the Swiss held off from enforcing their law about ill-gotten gains until after a dictator was forced to give up the reins of power. Hmmm...

The ousted President of Tunisia got the same treatment from the Swiss.

Last month, the Swiss froze the accounts of Mubarak's ally, ousted Tunisian president Zine El Abidine Ben Ali, whose overthrow inspired the first protests in Cairo.

So if you think your hold on power is weakening it is time to start transferring your money to Macao or the Caymans or some other place that doesn't rush to grab your cash the day you fly away from your capital in one of your private jets.

The Mubarak family has spread their risk of asset seizure around to many enclaves for the rich and powerful.

The Mubarak family reportedly owns properties around the world, from London and Paris to New York and Beverly Hills. In addition to homes in the Red Sea resort of Sharm al-Sheikh and the upscale Cairo district of Heliopolis, they also have a six-story mansion in the Knightsbridge section of London, a house near the Bois de Bologne in Paris and two yachts.

Dictators obviously need to diversify their holdings and avoid Swiss banks. But they become too confident and complacent about their hold on power. In the future as China lets its currency become a global trading currency Chinese banks might emerge as safe havens for dictator deposits. Also, assorted offshore banking countries should get more attention given the Swiss sunny day friend attitude.

Update: You can tell which semi-toppled leaders are really losing power permanently because Swiss asset seizures serve as a useful measure of whose hold on power is definitely going to end.

Other dictators have lately found themselves frozen out by the Swiss as well. For instance, the government has frozen the assets of Laurent Gbagbo, the president of Cote d'Ivoire, who lost a November presidential election but has refused to step down.

So if Swiss banks start seizing your accounts you'd better get to your private jet and fly to a country that will accept you as a retiree.

By Randall Parker 2011 February 11 11:02 PM  Power Perks
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2011 February 10 Thursday
Unions Oppose Federal Employee Cuts

A 270,000 US federal government employee union is uniting with other government unions to drum up opposition to cuts in the federal workforce. Government employees should not be allowed to form unions and work against the interests of the rest of us.

"We're acknowledging that it's our union that has to carry the story of federal workers," John Gage, the outspoken president of the American Federation of Government Employees said Wednesday as the four-day legislative conference wrapped up.

"We're going to energize and activate 2 million federal employees and their families," Gage said, "to let their representatives know these attacks will destroy [federal] agencies." AFGE has joined forces with other federal unions to fend off the targeted cuts.

What motivates these union workers? See my post US Government Counties Highest Paid.

By Randall Parker 2011 February 10 11:11 PM  Economics Government Costs
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2011 February 09 Wednesday
Adele - Right As Rain (Live acoustic)

You've probably heard the released version of this piece. But here she is singing it at 9 AM on a radio station and it provides a much better sense of her level of talent. Adele does not act like she has to try hard to sing a song almost as well as her released studio version.

By Randall Parker 2011 February 09 05:42 PM  Music
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2011 February 08 Tuesday
Geert Wilders: The Lights Are Going Out All Over Europe

Baron Bodissey has the speech Geert Wilders delivered on the day his new trial just began. The Lights Are Going Out All Over Europe.

The lights are going out all over Europe. All over the continent where our culture flourished and where man created freedom, prosperity and civilization. The foundation of the West is under attack everywhere.

Our elites are our enemies.

All over Europe the elites are acting as the protectors of an ideology that has been bent on destroying us for fourteen centuries. An ideology that has sprung from the desert and that can produce only deserts because it does not give people freedom. The Islamic Mozart, the Islamic Gerard Reve [a Dutch author], the Islamic Bill Gates; they do not exist because without freedom there is no creativity. The ideology of Islam is especially noted for killing and oppression and can only produce societies that are backward and impoverished. Surprisingly, the elites do not want to hear any criticism of this ideology.

Our multicultural elites are waging total war against their populations.

My trial is not an isolated incident. Only fools believe it is. All over Europe multicultural elites are waging total war against their populations. Their goal is to continue the strategy of mass immigration, which will ultimately result in an Islamic Europe — a Europe without freedom: Eurabia.

The lights are going out all over Europe. Anyone who thinks or speaks individually is at risk. Freedom-loving citizens who criticize Islam, or even merely suggest that there is a relationship between Islam and crime or honour killing, must suffer, and are threatened or criminalized. Those who speak the truth are in danger.

Also, read "Albert" on the extent to which the American government has become an enemy of the American people.

By Randall Parker 2011 February 08 12:14 AM  Elites As Enemies
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2011 February 07 Monday
Harvard Study Questions Universal College Education

The 4 Year degree is not the solution to all of our problems.

But increasingly, some educators are calling for more attention to the career part of the equation – and questioning whether a traditional four-year college degree is necessarily the best path for everyone.

A new report released by Harvard Wednesday states in some of the strongest terms yet that such a “college for all” emphasis may actually harm many American students – keeping them from having a smooth transition from adolescence to adulthood and a viable career.

“The American system for preparing young people to lead productive and prosperous lives as adults is clearly badly broken,” concludes the report, “Pathways to Prosperity” (pdf).

They acknowledge that some kids do not want to sit in classrooms. Imagine that. Of course, they can't say that some kids have IQs that are too low to finish high school, let alone go to college. But this admission is an important step on the road toward greater realism about the limits to college as a tool for raising up the poor.

They point to vocational training programs in Europe as a model for making education more relevant to those who are now dropping out. They argue that the heavy emphasis placed on the college track in high school is driving away those students who are not interested in all that book learning. But how many of the skills taught in vocational learning tracks are for jobs that are going to get automated out of existence in the next 20 years?

The report assumes (very incorrectly) that higher education accounts for the bulk of the differences in financial outcomes between those with different educational levels.

Workers with at least some college have ballooned to 59 percent of the workforce, from just 28 percent in 1973. Over the same period, many high-school dropouts and those with no more than a high-school degree have fallen out of the middle class, even as those who have been to college, and especially those with bachelor’s and advanced degrees, have moved up.5 The lifetime earnings gap between those with a high school education and those with a college degree is now estimated to be nearly $1 million. And the differential has been widening. In 2008, median earnings of workers with bachelor’s degrees were 65 percent higher than those of high school graduates ($55,700 vs. $33,800). Similarly, workers with associate’s degrees earned 73 percent more than those who had not completed high school ($42,000 vs. $24,300).6

What they do not say: A large part of that gap is due to smarter people going to college and therefore smarter people removing themselves from the category of the less educated. 60 or 70 years ago the average person who got no further than high school was much smarter than today. A large fraction of the smart people did not go to college. Today so few smart people do not go to college that the high school drop-outs and those with only a high school degree are much dumber than was the case in the past.

Their argument: lots of jobs require training other than a traditional college education. Quite true and quite obvious. But now someone at Harvard has said it. So it is okay to believe it now. Don't you feel a sense of relief that your common sense is backed up by a report from Harvard? You can now make this argument without being outside of the mainstream.

The Georgetown Center projects that 14 million job openings—nearly half of those that will be filled by workers with post-secondary education—will go to people with an associate’s degree or occupational certificate. Many of these will be in “middle-skill” occupations such as electrician, and construction manager, dental hygienist, paralegal and police officer. While these jobs may not be as prestigious as those filled by B.A. holders, they pay a significant premium over many jobs open to those with just a high school degree. More surprisingly, they pay more than many of the jobs held by those with a bachelor’s degree. In fact, 27 percent of people with post-secondary licenses or certificates—credentials short of an associate’s degree—earn more than the average bachelor’s degree recipient.7

Well, lots of bachelor's degrees are earned in subjects that are nearly or totally economically worthless. It is not a surprise that some people who get trained in market-relevant skills make more money without attending college. Even some of those who make more money after attending college could have saved a lot of time and money by instead going for training in what they ended up doing.

The inter-racial differences in youth unemployment are huge. You might think these facts are an argument against immigration. Hispanic teens have a very low employment rate as compared to white teens. Do we really want to dig ourselves deeper into a hole and bring in more people who won't succeed in a labor market that places a high premium on advanced skills and which finds a decreasing need for manual laborers?

Since the Great Recession began, teens have been hit harder than any other age group by unemployment. As a result, the percentage of teens (16-19) who were employed fell from 45.2 percent in 2000 to just 28.6 percent in June 2010. Clearly, teens now face Depression-era employment prospects. Unfortunately, this catastrophe has hit low-income minority teens especially hard, even though they are the very youth who are most likely to struggle in school and who most need the supports that employment provides. Incredibly, just 9 percent of low-income black teens are employed, as are just 15 percent of low-income Hispanic teens. In sharp contrast, the employment rate among upper middle-income white teens (whose families earn $75,000 to $100,000 a year) is 41 percent—four times higher than among low-income black teens.

The American nation is not on the pathway to prosperity. We got off on an exit and got back on the road going in the opposite direction.

I am reminded of a recent Michael Mandel post where he found that at the end of 2010 for those ages 25-34 high school graduates have a 12.9% unemployment rate while college grads have a 5.3% unemployment rate. The US labor market's demand for less skilled workers is headed downward. Here's graphical longitudinal comparison of unemployment levels as a function of education. The high school drop-outs have about 15% unemployment. What do their labor market participation rates look like? Note that the US economy looks like it can grow without its laid off former workers.

By Randall Parker 2011 February 07 11:45 PM  Education Returns On Investment
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Egyptian Reign Of Terror Seen Possible

Historian David A. Bell has an essay in Foreign Policy that is worth a read: Why We Can't Rule Out an Egyptian Reign of Terror.

There are, of course, many different ways of categorizing historical revolutions. But for the purposes of understanding what is happening in Egypt -- and the challenges it may pose for the United States -- one simple, rough distinction may be especially useful. This is the distinction between revolutions that look more like 1688 and revolutions that look more like 1789. The first date refers to England's "Glorious Revolution," in which the Catholic, would-be absolute monarch James II was overthrown and replaced by the Protestant William and Mary and the English Parliament claimed powerful and enduring new forms of authority. The second is, of course, the date of the French Revolution, which began as an attempt to create a constitutional monarchy but ultimately led to the execution of King Louis XVI, the proclamation of the First French Republic, and the Reign of Terror.

He says the revolutions that are like 1789 are less common. Most revolutions are noted for their brevity. The 1979 Iran Revolution was more like 1789 in that the mullahs killed a large number of people and greatly reordered Iranian society. Will that be Egypt's fate? He argues that revolutions that are long lasting are not necessarily initially led by those will eventually get power and initiate far more violent and wrenching changes.

Already in Egypt the secularists who started the protests are starting to lose ground to the Muslim Brotherhood.

Though it was not a driving force behind the demonstrations that began Jan. 25 and grew into a popular uprising, the Brotherhood has wasted no time setting the groundwork for a political resurgence. Its leaders have now claimed their place among those who met Sunday with Omar Suleiman, Mubarak's newly appointed vice president, to discuss constitutional reforms and a transition plan.

The development has left some of the more liberal, secular protesters visibly unnerved.

Bell says the risk of a revolution going down a more radical path rises if the first leaders to take power can't deliver meaningful reforms that better the conditions of the people. Well, I am very skeptical that a regime change can do much to improve conditions in Egypt, where half the population lives on $2 or less per day (or maybe only 18% of Egyptians live on $2 per day). In such a parlous state these people can ill afford for the government to cut food price subsidies. Yet Egypt will soon shift to being an oil importing nation. The costs of imported oil and the need to also import more food for a rapidly growing populations suggests that Egyptians are going to become poorer regardless of who rules. So any initial round of replacements for Mubarak will inevitably disappoint the poorer and more religious peasants. If they are given the right to vote will this placate them? Will a democratically elected Islamic slate of politicians

The consensus of left wing liberals and right wing liberals is that economic growth can heal all the world's political troubles. I am skeptical of this consensus for a number of reasons. I see Peak Oil approaching and expect it alone to rip the heart out of the world economy. Also, suitable land for expanded agricultural production is in short supply in a growing number of countries.

Tyler Cowen's new Kindle book (a mere $4) The Great Stagnation: How America Ate All The Low-Hanging Fruit of Modern History,Got Sick, and Will (Eventually) Feel Better makes the argument that the rate of innovation has slowed down due to a slow rate of fundamental discoveries that enable new industries. So, for example, mid 20th century discoveries such as the transistor, laser, and some other technologies that enabled great economic growth in the 1950s and 1960s have not been followed up by as many enabling discoveries in recent decades. So the world's economy is running off of too any refinements of old technologies.

I think we are headed for a period of greater revolutionary upheaval because political reforms won't be capable of meeting rising expectations. As those expectations collide with declining living standards governments will fall.

By Randall Parker 2011 February 07 09:12 PM  MidEast Insurgencies
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Why Not Limited Hours Post Offices For Rural Areas?

The US Postal Service has experienced a 20% drop in mail volume in the last 5 years due to more online banking, utility billing, and other shifts to the web. As a result, half the nation's post offices are operating at a deficit and the Postal Service is thinking about closing over 16,000 out of 32,000. In 2010 the US Postal Service ran an $8.5 billion deficit. So little post offices like the one in Star Tannery West Virginia are on the chopping block.

It's all about the bottom line, Voorhees said. The Postal Service pays only $300 a month for its office in Star Tannery and a minimum of $33,000 a year for a postmaster, but revenue has fallen - from $37,316 in 2008 to $31,341 last year.

I've got a few modest proposals:

  • Let post offices open fewer days of the week. If everyone in some rural hamlet knew the post office was only open on Monday they could do their mailing on Monday.
  • Let post offices operate for reduced hours. If a post office was only open from 8 AM to 10 AM on Monday and noon to 2 PM on Thursday it would provide a large portion its current usefulness to rural towns. So one would have to wait a day or two before picking up or mailing a package. People would have to plan ahead more. But it would work.
  • In any rural area where the US government has field offices assign the occasional mail handling to people who do other things for the US government. For example, the US Department of Agriculture, US Forest Service, and US National Park Service have people all scattered about in rural areas. Some of them could be dual trained to do light postal service work.
  • Contract out postal service provision to Wal-Mart. They've got stores in lots of rural areas.
  • Contract with UPS to accept and deliver mail in areas where the USPS does not have enough business to sustain it.

BTW, if you haven't already moved your utilities and other bill handling online I highly recommend it. The total work load goes down when you no longer have to collect and open so much mail and when you can set up automated payments. The banks vary considerably in the quality of online service they provide. You might want to have one online bank and a separate bricks-and-mortar bank.

By Randall Parker 2011 February 07 05:33 PM  Economics Creative Destruction
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2011 February 06 Sunday
Egyptians Hostile To United States

Years of supporting Israel against the Palestinians have taken their toll on Egyptian views of the United States. We are not popular there. A democratically elected Egyptian government would likely have less friendly relations with both the US and Israel.

For three decades, Mubarak has maintained a steadfast alliance with the United States (lubricated by about $1.5 billion in annual aid) and presided over a cold-but-durable peace with Israel. Yet, Egyptian public opinion is overwhelmingly hostile toward both countries. In Pew’s 2010 global survey, just 17 percent of Egyptians expressed a favorable view of the United States; that tied with Pakistan and Turkey for the lowest rating the U.S. received in any of the 21 countries tested. Nearly three-fourths of Egyptians said they opposed U.S. antiterrorism efforts, and four-fifths wanted the U.S. to withdraw from Afghanistan.

Egyptian attitudes toward Israel are even chillier, despite the landmark 1979 peace treaty. In a 2007 Pew survey, a stunning 80 percent of Egyptians said that the needs of the Palestinian people could never be met as long as Israel exists; just 18 percent said that the two societies could coexist fairly. That was far more pessimistic than the results in Turkey and Lebanon—and essentially no different than the attitude among the Palestinians themselves. “Of all the countries in the Middle East,” Walker says, “the population of Egypt is the most hostile to Israel.”

So, hey, give them the vote. Let them express their hostility thru the ballot box. What could go wrong?

With Egypt's growing population and declining Egyptian oil production the government's continued ability to subsidize food and fuel purchases for its poor seems in doubt. Since half the population lives on under $2 per day or less a failure of the Egyptian government to keep food prices low could easily spark a large scale revolt.

That is Mubarak's Egypt, where about half the population lives on $2 a day or less, and walled compounds with green lawns and swimming pools and names like Swan Lake spring up outside cities. It is a place where those with money have built a parallel world of private schools and exclusive clubs, leaving the rundown cities to the poor.

Egypt's troubles will continue and become more severe regardless of whether a faction of the current elite stays in power or elections sweep an Islamic party into power.

By Randall Parker 2011 February 06 11:27 PM  Mideast Poverty
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2011 February 04 Friday
If Egypt Goes Muslim Fundamentalist Democratic

I see an upside of Egypt gets elections and its populace votes in a theocracy: educational value. A Muslim government voted into power by the majority would educate some Westerners on how Muslim voters have values incompatible with Western values. I'm not saying the Panglossian supporters of open borders and multi-culturalism will come to their senses. But other segments of Western populations would learn something from watching the majority choose Muslim leaders who will repress women, mistreat the Coptic Christians even worse than they are mistreated currently, and show more hostility toward Israel.

It is not clear that the learning experience will be sufficiently instructive to those who most need to learn. But I'd prefer more learning experiences that take place outside of Western countries.

In a post Dennis Mangan wrote about Muslims in Europe commenter "Albert", who claims to be a US State Department employee in Europe, lays out the extent to which he sees the US Government as an enemy of the American people and points out the double standard granted for Muslim conduct as compared to non-Muslims conduct by the multicultural leftists who now dominate the permanent USG.

With regard to the post American Diversity Outreach, it is my sad duty to report to you that the USG is actively promoting this not only in France but throughout the European Union and elsewhere. The USG views the future and the meaning of the very word “democracy” to mean a democracy on the modern liberal capitalist globalist United States model, i.e. mass democracy with an extremely multi-ethnic population. To that end, historical nations are merely administrative bodies with particular historical backgrounds. A Turkish German is German. A Muslim Frenchman is French. Anyone who says otherwise is evil and will not be tolerated. Moves by any European government to treat their citizens differently based on ethnicity are viewed by USG as the same a denying Blacks in the U.S. civil rights and sends them into a shrieking frenzy. Any political party that opposes this is “monitored” by the U.S. and U.S. political and diplomatic capital is spent to discredit them.

In addition, the U.S. is fully committed to the proposition that the U.S. and Europe are Muslim as well as Christian and Jewish and Whatever entities. To that end, the U.S. has supported Albania and has created the new Muslim state of Kosovo. Kosovo and Albania are both led by criminals and murderers but in our ideological zeal this is not seen for what it is. It is seen, typically, as a need for MORE U.S. involvement, more “good governance” programs, more lectures to other Europeans that they’re not doing their part to integrate these countries into the European family.

A quick example suffices to make my point. As is now well-known, USG has come down squarely on the side of the protesters in Egypt, calling for Mubarak to step down. In doing so, we have trumpeted the right of the Egyptian people to freedom of speech and assembly and their right to petition to government as to their greivances.

However, in Kosovo, when in the north a group of ethnic Serbs gathered peacefully to demonstrate against the Kosovo government by picketing outside a local government office, which resulted in someone—presumably a Muslim—rolling a grenade into the demonstration, killing some demonstrators, our USG man on the spot reported that while the situation was lamentable, true responsibility for the deaths fell to the Serbs, who should have known that such an open demonstration would provoke Muslim violence.

So much for freedom of speech and assembly! So much for the right to petition a government of one’s grievances!

I see this sort of thing many times a day. The only thing one can conclude from this is that the USG has become fanatically ideological and will cram any facts into contortions to fit its ideological world-view. That this crazed body carries such immense power and weight bodes extremely ill for both the American people and the world.

I fear that no learning experience is going to shake loose the ideology that now rules academia and the USG until we are too far gone for it to matter.

By Randall Parker 2011 February 04 06:06 PM  MidEast Political Islam
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2011 February 03 Thursday
Coptic Christians Fear Mubarak Ouster

Christian George W. Bush's foolish invasion of Iraq led to large scale persecution, killing, and flight of Iraqi Christians. Bush's push for Middle Eastern democracy now threatens the Coptic Christians in Egypt.

Weeks before anti-Mubarak demonstrators in Cairo began their occupation of Tahrir Square, Copt protesters in Alexandria were choking on tear gas as they faced down government police.

But now, many say they're rethinking their opposition to Mubarak's government, fearing its collapse might spur an anti-Christian backlash if the Muslim Brotherhood or other Islamist groups gain a foothold.

"He's the best of the worst," said Sameh Joseph, a church worker at the Patriarch of the Orthodox Christians Church in Alexandria. "Whoever comes after him might want to destroy us."

The West should let all the Christians leave the Middle East and with proper financial incentives Christians and Muslims could swap places.

By Randall Parker 2011 February 03 10:33 PM  MidEast Religious Persecutions
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Illiterate Supporters Of Mubarak In Egypt

The thin professional class in Egypt most wants Mubarak gone from power. Recall that many educated Persians wanted the Shah gone. How'd that work out?

While rich and poor alike have joined the call for democracy, the movement has been led by the professional middle class - lawyers, doctors, university students and engineers. Many of the poor, who constitute the majority in Egypt, said they mistrust demonstrators' motivations and are concerned that the movement has a hidden foreign agenda.

That foreign agenda isn't all that hidden according to the (conservative) Daily Telegraph of London: "The American government secretly backed leading figures behind the Egyptian uprising who have been planning “regime change” for the past three years, The Daily Telegraph has learned. "

The funny thing about the US elite support for regime change in Egypt with democracy is that only a fairly thin elite segment of Egyptian society really supports the Camp David accords. What major foreign policy interest does a large chunk of the the US foreign policy elite see itself has having in the Middle East? Maintaining at least minimally cordial relations between Israel and its neighbors. What will a more populist Egyptian leadership be like toward Israel? Less cordial seems like a really good bet. The only question is just how much less cordial.

Anyone for literacy requirements for voters? A literacy requirements strikes me as well below bare minimum ability needed for voters in order for a democracy to function well.

But back to the WPost. Mubarak went to university. This makes him qualified to lead the illiterates as an illiterate Egyptian mechanic points out:

Sayed, dressed in worn jeans smeared with oil, said no decent Egyptian would insult the president as demonstrators have Mubarak.

"I don't read or write myself, but I know that Mubarak went to university, and since then he's done nothing but serve us," he said. "It doesn't make sense to me that after all that, we're just going to throw him away."

Suppose the illiterate of Egypt get the right to vote. They will not understand the nuances of what competing elite factions are trying to do by gaining power thru the ballot box. American voters are comparatively much better educated and yet they are hardly paragons of rationality or fairness. Take a populace far less skilled, less supportive basic freedoms, and more driven by a religion that is broadly hostile toward non-believers and who will they vote for? This isn't rocket science.

By Randall Parker 2011 February 03 08:56 PM  MidEast Insurgencies
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2011 February 02 Wednesday
Reasons For Enthusiasm About Egypt Revolutionaries?

Do Israelis or their neoconservative Jewish supporters in America have a more accurate assessment of Israel's best interests vis a vis Egypt? The invasion of Iraq and its aftermath suggest the neocons are more likely wrong.

But the events in Cairo have exposed a schism between two longtime allies: neoconservative Republicans, who strongly advocate democracy and the George W. Bush "freedom agenda" around the globe, and Israelis, who fear that a popularly chosen Islamist regime could replace that of President Hosni Mubarak.

I suspect the Israelis fear an inevitability. So it really does not matter whether any neocons support Mubarak's approaching loss of power. It will happen regardless of what the United States does.

I do not expect great improvements in Egypt as a result of regime change. Ouster of a secular dictator and replacement with a popularly elected government that enforces more Islamic law isn't going to bring on a new era of freedom and tolerance. The protesters are frustrated by high food prices, corrupt government, and poor career prospects. They are not pushing for freedom of religion or equality for women.

On the bright side, Egypt under democracy probably won't be radically worse than it would have been under Mubarak Junior either. The bad trends in Egypt (growing population in a resource poor nation, more intense embrace of Islam) will continue regardless of whether Egypt gets democratic Muslim rule or if a different top officer from the military takes over.

Writing at The Corner on the National Review Raymond Ibrahim thinks the US can make a big difference in how events unfold in Egypt. Count me skeptical.

It is clear that the media’s host of analysts is split into two camps on the Egyptian revolution: one that sees it as a wonderful expression of “people power” that will surely culminate in some sort of pluralistic democracy, and another that sees only the Muslim Brotherhood, in other words, that sees only bad coming from the revolution. These extremist views need balancing. The fact is, depending on what the U.S. does—or doesn’t do—the result of this revolt could either be the best or worst thing to happen to the Middle East in the modern era.

The world does not revolve around US foreign policy. The ability of the US to influence events in other countries is exaggerated by too many commentators who debate US foreign policy. America's influence around the globe is much exaggerated.

The Egyptian military wants to continue getting a few billion dollars per year from US taxpayers. So that gives the US some leverage. But the protesters aren't going to be swayed much by what the US government says. The revolutionaries are much more focused on domestic concerns, including battles with Mubarak's security forces. They've got street battles to win.

By Randall Parker 2011 February 02 10:43 PM  MidEast Insurgencies
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2011 February 01 Tuesday
What Regime Change Will Not Change In Egypt

What regime change in Egypt will not do:

  • The new regime won't be any fairer toward the Coptic Christian minority.
  • The new regime won't grant more freedom to women.
  • The new regime won't be any less corrupt. It will just have different people making the money.
  • The new regime won't manage the Egyptian economy so well that it will usher in a new era of more rapidly rising per capita incomes.
  • The new regime won't be any friendly toward Israel and the opposite could easily be the case.
  • The new regime will not validate the dream of democracy as the solution to all the world's political problems.

If elections are held then will the Muslim Brotherhood sweep to power? Depends on who is allowed to run.

Regime change is unlikely to solve the underlying problems in Egypt. It is hard to look at the demographics of this mostly desert country and see signs for optimism. Mubarak was ineffective in his efforts to address the underlying problem of too many people in too resource poor a country. What will the new regime do about population growth?

Since President Hosni Mubarak took office in 1981, the population has nearly doubled. But most of the country's 82 million people are squashed in urban areas near the Nile, in an area roughly the size of Switzerland, which is home to 7.5 million.

"Before you add another baby, make sure his needs are secured," ran the slogan, adding to a string of campaigns over 30 years to encourage family planning. Mubarak told a government-sponsored population conference that cutting population growth was urgent.

Egypt might fall back into the Malthusian Trap.

The outlook for both Egypt and the region will be grave if the most populous Arab country continues to grow at current rates, Egyptian and UN officials say.

"The consequences are a real deterioration in the quality of life and in agricultural land per person," said Magued Osman, chairman of the cabinet's Information and Decision Support Center. "We are depending heavily on imported food items and this will increase."

In Egypt the government subsidizes food prices to placate the poor. But the political unrest has driven up the prices of food and so the poor are under strain.

“Since Friday everything started to be expensive,” said Om Massad, a door lady handling deliveries in Bab el Louq, who said 5 piester bread is not available anymore and 50 piester bread has jumped in price to 60 piesters. One Egyptian pound is made up of 100 piesters, or about 17 U.S. cents. “Shops are taking advantage of these conditions,” she said.

The revenue earned by oil exporters in the Middle East probably insulates those regimes from the unrest we see in Egypt. By contrast, new regime in Egypt won't have any more money to pay for food subsidies and world food prices might go much higher. It is hard to see how the new regime is going to be able to meet the raised expectations of the street protesters.

Will the Muslim Brotherhood make any effort to slow population growth? Or will it keep women at home and pregnant? Women make up 69% of the illiterates in Egypt.

"Egypt is one of the most challenging countries for any literacy programme," a literacy programme administrator at Catholic relief agency CARITAS told IPS. "You can't afford to step off the pedal for a minute."

One in every four Egyptians is illiterate. Despite free education and long- running literacy programmes, the number of illiterates has changed little in over two decades. Nearly 17 million adult Egyptians can neither read nor write, according to recent government data.

The least educated rural folks make the most babies.

By Randall Parker 2011 February 01 08:29 PM  Mideast Poverty
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