Tis perhaps appropriate that my fondness for historically informed performances (HIP) of classical music ties into international political economy for two obvious reasons. First, with most music commissioned for religious rather than secular purposes during past eras, it highlights how music played a role in then-common agglomerations of church and state. Second, music was often commissioned for momentous occasions such as feting nobility for obviously political purposes.
So, instead of boring you with a roundup of opinions on whether the impending US technical default matters or not--you can do that yourselves and I can't say my opinion is necessarily more accurate than anyone else's--I bring you music and history. (The IPE Zone values cultural sophistication, historical referents, and attitudes of elegant despair on all epochs of subprime globalization.) You see, dear readers, one of my favourite performances remains the Academy of Ancient Music under Andrew Manze presenting Vivaldi's Concert for the Prince of Poland. The press blurb for the recording goes like so:
On March 21st, 1740, a gala concert was held at the famous Ospedale della Pietà in Venice to honour the visiting Frederick Christian, Prince of Poland. The four concertos written by the sixty-one-year-old Vivaldi still survive in the manuscript which was presented to the Prince as a souvenir of the occasion. Possibly the composer's last works, their brilliant technical writing, unusual scorings and innovative instrumental sonorities surely rank them among his most delightful music.
Obviously, you did not commission Vivaldi to write music for pissant guests. Even before he was immortalized in Muzak renditions of The Four Seasons played in elevators all over the world, he was a most distinguished member of Venetian society in its heyday. Just as Venice was then a trading centre keen on opening up trade routes throughout the continent, so was the Polish Empire no small beer as you can see from the map above. It was an empire in the true sense of the word, spanning vast tracts of Eastern Europe. To be sure, both Venice and the Polish Empire had entered into a stage of decline by this time. Still, the grandeur of the occasion served to reinforce the heights they had achieved before succumbing to the inevitable lethargy and competition from nimbler entities.
And so it was with great interest that I read American Tom Streithorst's comparison between the Polish Empire and modern-day America in Prospect--a left-of-centre British magazine focussing on politics. Although others have compared 21st century USA to the Roman and British empires as obvious analogies, I think there's something to be said for comparing it to the Polish Empire. Some thought-provoking analogies are made on how inbuilt features promoting institutional gridlock ground the show to a screeching halt in a relatively short span of time:
In the 1600s, the Polish Lithuanian state was a behemoth in eastern Europe, rich and powerful, feared from Stockholm to Moscow. One hundred years later, it ceased to exist, devoured by its neighbours. Perhaps the central cause of its decline was the liberum veto. Merely by standing up in parliament and shouting “I will not allow,” a single nobleman could nullify any legislation passed by the house. In the 17th century the liberum veto was used sparingly. By the 18th century it was commonplace. With its government crippled by the requirement of unanimity, and unable to respond effectively to changing circumstances, Poland ceased to exist in 1793, its territory divided between Russia, Prussia, and the Habsburg Empire.
No, even if the unthinkable happens and the US government defaults on its debt, I doubt its land will be taken over by Canada and Mexico. But the destruction of Poland shows how traditional constitutional arrangements can cripple a country. Without a supermajority of 60 in the US Senate, the will of the majority can be totally ignored. The filibuster, like the liberum veto, used to be deployed only in exceptional circumstances. Today it is a weapon used at will. Because each state has two senators, no matter its size, representatives elected by just 10 per cent of the population can stymie reforms demanded by most.
As Harry Lee Kuan Yew might say, the problem may be too much democracy.
♠ Posted by Emmanuel in Currencies,Music
at 11/11/2010 12:03:00 AM
An IPE@UNC homie name checks yours truly and points us in the direction of--I kid you not--the "US-Sino Currency Rap Battle." It's actually very entertaining if I have a quibble here and there. F'rinstance:
Uncle Sam goes from a beggar to more than holding his own against a panda (representing China) by the clip's end--not quite consistent;
The chorus stresses interdependence a bit too much for my tastes;
Since the scriptwriters are billing this as a primer on the upcoming G-20 summit, shouldn't there be some talk about Germany as well as others complaining about US actions like Brazil?
Why is "Timmy G" being sent by Obama to rat-ta-tat-tat his gat at PRC currency miscreants? He doesn't strike me as very tough since he's continually refused to designate China a currency manipulator. Also, his most memorable China incident was being laughed off at PKU when asked whether the PRC's dollar holdings were safe;
The animators missed this great opportunity to show Bernanke helicopter dropping wads of cash around the globe (please make this the subject of your next video feature!)
It's not really the use of the dollar as a vehicle currency but rather it's use as a reserve currency that buoys it. For the difference between a flow (less important) and a stock (more important) concept in foreign exchange, see a previous post.
Anyway, those are minor nitpicks. More of this! (And yes, they probably should just cut the crap and start fighting already. We're all likely better off that way instead of sticking with a suboptimal current situation.)
♠ Posted by Emmanuel in Music
at 8/31/2010 12:03:00 AM
It shouldn't surprise anybody that I am an avid Philip Glass fan. While I generally disdain low American strip mall, subprime, and SUV culture, his work is of a higher standard. Known almost to all, Glass is arguably the finest living American composer. At a time when popular awareness of classical music is approaching nil, he bravely carries the torch. Of course, it helps his international reputation that Glass bashes widespread American atrocities such as the invasion of Iraq in the name of freedom and growth. (It may sound funny but the artistic reputation of Yanks who enjoy bashing their own is generally higher abroad.) In particular, I enjoyed his play Waiting for the Barbarians in which he dwells on the themes of state-sponsored torture and repression.
While listening to yet another addition to his extensive discography featuring the Glass Chamber Players fronted by his girlfriend Wendy Sutter, I was taken by the informative liner notes that suggest American cultural depravity and the compositional flourishes of Glass may be related after all. As it turns out, Philip Glass's father became an initially reluctant listener to modern composers such as Arnold Schoenberg, Bela Bartok, and Dmitri Shostakovich (who I do listen to, by the way). Ben Glass had trouble selling their records at his music store. To investigate why, he took these records home:
In another story, Glass would tell of the “return privilege” which was part of the record industry in which retailers were allowed to return a certain percentage of the records if they were damaged. In order to exercise this privilege, Philip and his brother Marty would go down into the basement and break the records that had not sold. This was the first job that Philip Glass ever held in the music industry.
Such an action was a logical answer to a problem: what to do with the records that didn’t sell? Being a very practical guy, as we saw with the evolution of his businesses, Ben Glass had another idea. He would take the records home and listen to them to try to find out why people weren’t buying them. It just so happens that the music which was not selling was classical and 20th century chamber music by composers like Schoenberg, Shostakovich, and Bartok. It was in this way that the Glass home record collection of 78s grew and that a very big part of Philip Glass’ artistic sensibilities were first cultivated. The soundtrack of Philip Glass’ youth had been created.
It is important to the history of music is that Philip Glass spent time as a young person at home with his father listening to chamber music records. Ben Glass was not an educated musician, but he was a music lover in best sense. In the process of listening to these records to “find out what was wrong with them,” he became a sophisticated listener and developed a taste for chamber music. Father Glass would bring Philip in to the room and simply say to the future composer, “Here kid, listen to this.” Years later, after his father’s death, Glass composed his first concert-work as a mature composer, his Violin Concerto No.1 in 1987. He composed it as a piece that he hoped his father would have liked in the tradition of the great concertos by such composers as Mendelssohn, Sibelius, and Tchaikovsky concertos.
And so the young Philip Glass was well on his way to becoming what he is today. Not bad for a onetime taxi driver. It's strange but true: American cultural ignoramuses defined the formative years of Philip Glass. I guess that's something to be thankful for as we contemplate the idiosyncrasies of Einstein at the Beach.
Never let it be said that there's no art to blogging. Alike in the offline world, there are talented folks who know how to weave a compelling narrative out of a mundane story, and there are those who weave a mundane narrative out of a compelling story. Today, I will of course try for the former--as I always do ;-) IMHO, something that separates a good blogger from a pedestrian one is an eye for something everyone else misses...
Once more demonstrating that you don't have to look far for IPE-relevant material, I came across this featured story on Yahoo!'s front page yesterday. There it was staring me in the face: a pretty damning indictment of what I've been taught all my life. Like me, you probably grew up in a generation that disdained blue collar work. That is, work which actually involves physical exertion and being good with one's hands has been frowned upon. It is not that these biases were made up on our own; our parents also had a role in drumming in the message that "manual labour" was something dirty. Hence, many of you are also of a generation told that lawyers, bankers, businessmen, and the like had it made. The white collar life was supposed to promise the land of milk and honey.
Certainly, academia has had an interest in propagating this story since it provides fodder for ensuring a steady stream of tuition-paying students in law, commerce, and business. Various American commentators like former Fed Chairman Alan Greenspan have constructed an entire narrative out of "knowledge workers." In recent times, that has meant training to be a software engineer or some other lofty position that makes the most of conceptualizing abstract ideas and similarly high-faluting rhetoric. The truth, though, is much less compelling. Take America (please). Not only are there scores of unemployed college graduates there, but wages of college graduates have been on a downward trend since 2000. So much for the college myth.
The aforementioned Reuters article rubs it in further by pointing out that, actually, the skills which are most in demand worldwide are not those requiring fancy college degrees but fairly "mundane" blue-collar certification:
Workers with specialized skills like electricians, carpenters and welders are in critically short supply in many large economies, a shortfall that marks another obstacle to the global economic recovery, a research paper by Manpower Inc (MAN.N) concludes. "It becomes a real choke-point in future economic growth," Manpower Chief Executive Jeff Joerres said. "We believe strongly this is really an issue in the labor market."
The global staffing and employment services company says employers, governments and trade groups need to collaborate on strategic migration policies that can alleviate such worker shortages. Skilled work is usually specific to a given location: the work cannot move, so the workers have to.
The shortage of skilled workers is the No. 1 or No. 2 hiring challenge in six of the 10 biggest economies, Manpower found in a recent survey of 35,000 employers. Skilled trades were the top area of shortage in 10 of 17 European countries, according to the survey.
While the short-term way to address to shortages is to embrace migration, the long-term solution is to change attitudes toward skilled trades, Manpower argues. Since the 1970s, parents have been told that a university degree -- and the entry it affords into the so-called knowledge economy -- was the only track to a financially secure profession. But all of the skilled trades offer a career path with an almost assured income, Joerres said, and make it possible to open one's own business.
In the United States, recession and persistent high unemployment may lead parents and young people entering the workforce to reconsider their options. The skilled trades category also includes jobs like bricklayers, cabinet makers, plumbers and butchers, jobs that typically require a specialist's certification.
Older, experienced workers are retiring and their younger replacements often do not have the right training because their schools are out of touch with modern business needs. Also contributing to the shortage is social stigma attached to such work, Manpower argues in its paper published on Wednesday.
A poll of 15-year-olds by the Organization for Economic Cooperation and Development found only one in 10 American teenagers see themselves in a blue-collar job at age 30. The proportion was even lower in Japan. Education could address that stigma. Students should be reminded that blue-collar work can be lucrative: skilled plumbers can make upwards of $75,000 a year, Manpower argues. Overall, Manpower's fifth annual talent shortage survey found 31 percent of employers worldwide are having difficulty filling positions due to the lack of suitable workers available in their markets, up one percentage point over last year...
And there's also the problem of developed countries reluctance to accept more migrants despite a lack of workers with the requisite skills:
Examples of successful, targeted migration include an Ohio shipbuilder that brought in experienced workers from Mexico and Croatia, and a French metal-parts maker that hired Manpower to find welders in Poland.
Obstacles to such migration include differing standards for certification in skilled trades, as well as political barriers to immigration, which remains an "emotive" subject in many countries, Manpower's CEO said. Japanese employers, for example, have difficulty attracting skilled workers. Sweden, on the other hand, is innovative and aggressive about strategic migration, for example by removing obstacles to workers being recertified in their specialty, Joerres said.
Coming from a country that is a large sender of migrants, I myself work on these issues of international certification and similar qualifications. In the end, all I ask is that we be allowed to compete on a level playing field despite obvious disadvantages of relative poverty and the need to traverse often vast distances away from hearth and home. For obvious reasons, though, many of those in the West would rather not extend the opportunity to foreigners to compete for qualifications on similar terms. I prefer to think that hard work will help me overcome prejudices in a white man's world.
At any rate, do read the Manpower publicationStrategic Migration - A Short-Term Solution to the Skilled Trades Shortage discussed in the article above as it is quite illuminating, Manpower certainly knows its business as it is the second largest staffing company in the world. While lifting limits on migration in order to combat global slowdown is certainly of interest to me, the fact that much-maligned blue collar work is actually what's in short supply should be a wake-up call to others. Perhaps higher education is a fraud foisted on me that I've helped perpetuate. It's not a comforting thought, but hey, sometimes the truth hurts but needs to be told.
* * * On my walk home, I usually pass Priscilla: Queen of the Desert, Dirty Dancing, and Legally Blonde. Obviously, the Brits are fond of making musicals out of blockbuster movies. Guess what's opening soon in London's theatre district? I kid you not: Flashdance: The Musical [!] Critics have always disparaged this movie and its plot that beggars belief. IMDB's plot summary sums it up nicely:
Alex Owens is a female dynamo: steel worker by day, exotic dancer by night. Her dream is to get into a real dance company, though, and with encouragement from her boss/boyfriend, she may get her chance. The city of Pittsburgh co-stars. What a feeling!
OK, so I too thought Flashdance was more of a vehicle for the 80s soundtrack than the other way around. The new musical is in the same vein: more a platform for catchy 80s songs than plot-driven drama. Still, it begs the question: if a musical featuring a hackneyed tale about a welder can be made into a London musical, what is there stopping blue collar trades from being made "glamorous" as well? It's a task of changing perceptions that begins with parents who influence their offspring's career choices. I personally believe that unemployment is unglamorous, so the blue collar stigma is undeserved.
Ultimately, perhaps it's those of us with degrees in higher education who are the real dummies. Moreover, I suspect this world would be a much better place if there were more welders than, say, investment bankers--whether they choose to be exotic dancers at night or otherwise. Young son or daughter, in the immortal words of, er, Irene Cara, take your passion...and make it happen.
UPDATE: Kindred over at IPE@UNC suggests that I was mistaken over a "few facts" about US income trends. Now Kindred's a good kid, but he is wet behind the ears as he tends to put words in my mouth and gets embarrassed for it. Anyway, I decided to look up the numbers for myself instead of relying on other's charts. Below are the figures for US income for those 25 and up for the years 2000 to 2008 from US Census Bureau tables P-16 and P-18. It doesn't matter whether it's the mean or the median or if you're male or female; real annual income has been falling there since 2000. It doesn't matter either if you're a college graduate or have a higher educational attainment [click to enlarge image]:
I guess the furriner is more familiar with US stats than the American. Also at grad school, you are taught not to compare apples and oranges, but he does so by quoting another data series and naively suggesting differences have something to do with using "mean" and not "median" data. The table above should shelve that schoolboy howler (and I even use the same data series!) Maybe Kindred should visit Singapore for I suspect the educational standard there isn't declining as markedly as it is in America. R-E-A-D-I-N-G comprehension suggests this post is about college prospects post-(US led) financial crisis, so there you go with regard to time frames. Oh well, it's good he at least recognizes income there isn't rising unlike before. As an educator, I find patience with the recalcitrant to be a virtue. Lastly, the point Manpower makes is that there are technical and vocational degrees that stand you a good chance of landing a job while there are many college degrees that don't. Again for the S-L-O-W learner, it's not college vs. non-college but in-demand technical or vocational degree vs. not-in-demand college degree. And don't get me started on this being a worldwide survey instead of another boringly parochial American one.
You have to wake up pretty early in the morning to put one over ol' Emmanuel, Wizened IPE Buzzard ;-)
♠ Posted by Emmanuel in Europe,Music
at 5/31/2010 12:13:00 AM
Appropriately given the EU's current situation, I am reading leading institutional scholar Johan Olsen's Europe in Search of Political Order. Having had the pleasure of meeting him, I am most impressed by this volume. While reading this book, I recently turned on the TV and saw the 55th staging of the strange spectacle known as the Eurovision Song Contest. If you are unfamiliar with Eurovision, it is nearly exactly what its title suggests--a song competition hosted by European countries. In short, it's Europe's Got Talent long before Simon Cowell arrived on the scene. (And, critics would say that many entrants are singularly lacking talent.) Now, what does Eurovision have to do with the search for political order in Europe, you ask? In its own odd way, Eurovision has been a platform for establishing a pan-European identity in the wider integration project. It is a way of creating "we-feeling." As Professor Olsen so aptly puts it:
The level of institutionalization and integration increases as the constitutive units...develop a common public space, civic society and institutions able to educate and socialize individuals into informed citizens with a shared political identity and culture (p. 96).
In a nutshell, this is what Eurovision tries to do. While most Eurovision acts are never to be heard from again, Eurovision has also spawned winners alike world-famous ABBA and Celine Dion. Yes, you may quibble endlessly about the tackiness of it all--the MTV wannabe productions and faithful copping of Anglo-Saxon pop conventions are evident to everybody. Consider, however, that this banality is a means of socializing citizens in European countries--and Europe's neighbouring countries--in the ways of capitalist liberal democracy.
While some say that the football field now represents the (infinitely preferable) arena for competition for European nations than the battlefield, I have recently pointed out that dubious applications of EU migration law to the sporting arena have diluted the identity of national clubs. For all its flaws, Eurovision might be a more honest vision of regional competition that invokes the European identity--more so than the Champions League or even the European Football Championship.
What struck me this year were the following:
1. On a not-so-positive note, many European countries chose not to send entrants to Oslo, the site of this year's competition, because of budgetary constraints. Given sizeable budget deficits in any number of European countries, making catchy MTV-style videos as well as flying, feeding, accommodating, and outfitting contestants is apparently hard to justify:
The Czech Republic, Montenegro, Andorra and Hungary have snubbed this year's 55th competition in Oslo because of cash cuts, organisers admitted. Svante Stockselius, executive supervisor of Eurovision, said: "The economic crisis is affecting us. We have fewer countries competing and they all withdrew for the same reason - cuts."
2. On a more positive note, Turkey finished second in the competition with the entry embedded above. In 2003, it won the whole shebang. IMHO, it is far superior to the German entry that ultimately won. Speaking of which, these two countries figure large into the question of whether Turkey will be allowed to join the EU. Together with France (and to a lesser extent Austria), Germany has long been at the forefront of hindering Turkey's membership prospects--especially over democracy, human rights, and so on and so forth. Hence the notion of a downgraded "privileged partnership" that is being peddled to Turkey instead of full EU membership. Although Israel of all countries has won Eurovision before (even Andorra and Morocco have participated), Turkey's continued participation and strong performances in this event bear notice. If a country can so slavishly copy European throwaway culture, why is there so much skepticism that it cannot blend in if it joined the EU?
Moving back to the unavoidable realm of football, Turkish club Galatasaray has even been a UEFA Cup winner. If you can be "champions" of Europe in song and sport, then there is no sensible reason to be denied membership in the European Union, is there? As MaNga sings above in lyrics that may perhaps apply to Turkey's application for EU accession:
I can see that this could be fate I can love you more than they hate Doesn't matter who they will blame We can beat them at their own game
Whether the game is singing or football, Turkey has indeed demonstrated Europeanization by beating them at their own game. I may love Eurovision more for the ideal it represents than entertainment value, but there are lessons for integration here that we should all take heed of. We could be the same / No matter what they say.
3. Lastly, speaking of the political economy of Eurovision, it's no surprise certain judges didn't give the Turkish entry any points and other voting patterns continuing:
MaNga received 12 points from France, Croatia and Azerbaijan and 10 points from England, Macedonia, Bulgaria and Germany. They were not given points from Greece or Greek Cyprus...
As in earlier years, regional blocks played a huge role in attributing points: Greece gave the maximum of 12 points to Cyprus who returned the favor; Serbia gave its points to Bosnia-Herzegovina, while Belarus' top marks went to Russia.
Since judges and audiences cannot vote for their nation's entry, Eurovision has been used to sort out national loyalties and rivalries in the European context. (Obviously, the Greeks aren't too fond of the Turks given their past run-ins over Cyprus.) Some researchers at Oxford have even used network and cluster analysis to this effect [!] Interesting stuff.
Are you kidding me? Did we take advantage? That's what we do, that's how the world works! If you want an objective morality, you're living in a dream. So when you ask, 'did we take advantage?', I hear, 'do you make a living?', 'do you breathe in and out?', 'are you a man?'! Yes, we took advantage. And the only difference between me and the people judging me is they weren't smart enough to do what we did. Now, are you gonna judge me or are you gonna help me? -- 'Jeff Skilling' in Enron the Play
Samuel Johnson is attributed with saying that a person who is bored with London is bored with life. Well, add this to London's brilliant parade. Some of you probably know this already, but in case you don't, they've been staging Enron the Play since November of last year and it has just extended its run based on initial success. This play mixes factual elements about the Enron story--routing Internet broadband through pipelines originally intended for delivering energy--with more fantastical takes on true-to-life elements such as CFO Andrew Fastow naming various investment vehicles designed to inflate earnings and conceal debts after Star Wars characters. So, it's a mix of fact and fiction. For good measure, they even throw in a love interest for the disgraced Jeff Skilling.
The play has been receiving quite positive reviews from the business and mainstream press, so yes, it's definitely something I have to see. If you are passing through London and have an interest in financial shenanigans and musicals, it's a must-see. Nixon in China? What we have here is more like artistic license with a heaping financial pretence. They even have an Enron Education Resource Pack [?!]
Given Enron the Play's success, I am once again shopping around my very own Tony Blair: The Musical!
♠ Posted by Emmanuel in Music
at 2/04/2010 01:25:00 AM
Dear readers, rest assured that I do not watch films replete with toilet humour on a regular basis. I prefer to watch, ah, documentaries. This bias, however, has let me down in one respect: I missed the spoof above from the closing credits of Sacha Baron Cohen's latest release, Bruno, where he plays a flamboyantly gay Austrian fashionista. I find Cohen's brand of comedy too puerile; although his main characters are interesting--Ali G, Borat, and Bruno--they are too much when taken in excess amounts such as in film-length features. He's already done satire on America's underbelly with his previous film so the current one is a tad repetitive. The clip above, though, is something of a welcome diversion at only two and a half minutes.
Interestingly enough, it turns out that Cohen is a graduate of no less than Cambridge, where he studied under famed economic historian Niall Ferguson. (As an aside, Ferguson will be a scholar in residence like yours truly--albeit a somewhat better known one--at LSE IDEAS this year.)
Anyway, this clip makes me warm to Bono a bit for a number of reasons. Many think of him as an insufferable blowhard; I have often shared this sentiment. While I do like U2 tunes in general, his stances on aid for Africa can become grating in their stridence. Here, however, Bono participates in a pretty funny send-up of "USA for Africa" and "Live Aid" with fellow pop stars Chris Martin (of Coldplay), Sir Elton John, Slash, Sting, and Snoop Dogg. I particularly like Elton's spoof of Bono's sunglasses fetish with his spectacles featuring the words "EJ" prominently showing on the lenses. If you missed it, his piano chair is a man crouched on all fours. Weird.
Maybe Bono can win over those who think him too overbearing. As I said, small doses of Sacha Baron Cohen can work in some instances. "The Dove of Peace" works for me: I have a dream for the Third World: clean water, food and teaching...
UPDATE: There is a much clearer copy of "Dove of Peace" on YouTube. Unfortunately, I cannot use it as the resolution is wider than my current template. I've thought of updating my template to make it wider but I've noticed that many visitors still have monitor resolutions of 1024x768. Since viewing pleasure is my #1 goal, I'll keep this template until nearly all users migrate to 1280x1024 or higher.
This being the IPE Zone, you should by now expect a higher standard of prose than average blog fare. After all, I claim to affect attitudes of elegant despair on subprime globalization. Now, one of my favourite subjects has been protectionism the world over. Unsurprisingly, I once vouched that "I am a true aficionado of all sorts of protectionism, appreciating the full range and infinite verisimilitude of human folly." Well, at the end of this post, I may be accused by some of reneging on my general amusement at protectionism by, well, actually indulging in it. But before you get me wrong, read on.
I trust that all of you are familiar with the plight of famous British brands like Jaguar, Land Rover, and Tetley's Tea. Like many others, these marquee names have all been purchased by Indian firms in an act of "reverse colonization." In this case, the Tata Group owns all three. What's notable is that there wasn't much of a fuss with foreigners buying up these archetypally British brands.
However, a far larger issue has been made of American firms trying to buy the great British chocolatier Cadbury plc. Over these past few weeks, Kraft has been trying to take over this greatest symbol of British food industries. If you're not up to speed with this attempted Yank purchase of Cadbury, hie thee to the Financial Times where they have an entire section dedicated to it. To summarize, there are two main arguments against an American buyout of Cadbury, nationalist sentiment aside. First, American chocolate is crap, and having the great Cadbury run by Yanks will also make Cadbury taste like crap. To be honest, I am totally in agreement about the demerits of American chocolate, particularly milk chocolate. While some of the chocolate bars are interesting, US milk chocolate tends to be chalky in texture--heck, even Cadbury made in America tastes that way. It's nothing the Cadbury gorilla can groove to. As an erstwhile Brummie (someone from Birmingham, the birthplace of Cadbury), I've always supported the local product as opposed to arguably superior if more expensive continental European fare. Theirs is mostly dark chocolate, of course.
Second, and this is the more important and less "subjective" point, the finances of Kraft are pretty vile. In comparison, Cadbury has been a steadily profitable business unlike certain casino capitalist financial concerns you find all over the place here in London. Cadbury has a bevy of recognizable and well-loved brands, a wide range of chocolate products, and catchy advertising as you can gather from the clip above (so sue me if it's more 80s music; dig the parody too).
In contrast, the Yankee Kraft concern trying to take over Cadbury has few of those things going for it. Lord Mandelson, the man who now effectively runs Britain, does not seem to be very well-disposed towards this takeover attempt. Major Kraft shareholder Warren Buffett is up in arms over this acquisition attempt as well because of the strains it would put on already-shaky Kraft finances. I was thus amused to find an article in the London Times arguing (get this) Hands off the Crunchie, Lord Mandelson [!] Obligatory rips at uncouth Americans aside, it's chock-full of interesting and entertaining points:
Any Brit who has ventured Stateside can testify to how utterly revolting American chocolate is. Ours is lovely, I can confidently report, having just confirmed with a munch on a Green & Black’s caramel. Charles Dickens almost certainly noted the disparity in quality on his US tours, in papers alas lost to posterity. We may have ceded our position as top dog to the United States, we may resemble a desperate-to-please puppy, yapping up at our former colony demanding attention, but at least we can make a chocolate bar.
Kraft’s hostile £10.6 billion bid for Cadbury is, as takeovers go, a passion-rouser. The immediate impulse of those of us raised on Cadbury’s chocolate is to throw a protective arm around our Fruit & Nuts. Hershey, whose very name prompts the gagging reflex in anyone who has tasted their revolting kisses, might be mulling a bid. Not one, but two evil, giants circling our plucky chocolatier.
But wait! Is that Lord Mandelson riding to the rescue, brandishing a golden ticket and scattering the yankee upstarts like rebel Oompa-Loompas? Lord Mandelson has not been a quiet observer of the Kraft-Cadbury tussle. He has made his preferences clear. Like the rest of us, Mandy prefers his chocolate British. He prefers jobs to be British, rather than not. Unite, the union, believes that at least 7,000 British jobs would transfer to the US in the event of a successful takeover.
He has postured and pontificated, but as he has no power over the bid he has been largely ignored. The Government can only intervene if foreigners attempt to take over key strategic industries — such as defence companies. Lord Mandelson’s attempts to influence the outcome have, hitherto, fallen firmly in the chocolate teapot category...
In terms of industrial policy, the price of protectionism is interference, high taxes, regulation. A more open system demands light-touch tax and regulation. We could end up with the worst of all worlds: a theoretical model based on free trade, presided over in practice by a man who threatens intervention without telling anyone the new rules, all in a business climate that is a burdensome, bureaucratic fog.
The problem with the Kraft takeover, from a financial rather than epicurean perspective, is the indebtedness, not the nationality, of the predator. Unite, the union, estimates that the takeover would leave a £22 billion debt mountain to be serviced, which means job losses and short cuts on quality control. If Lord Mandelson wants to be really useful, he could look at restrictions on takeovers based on excessive leveraging, not nationality. But “less debt in the mergers and acquisitions market” is not as catchy a pre-election rallying call as: “Back away from my Crunchie, Yankee!”...
We would all like Cadbury to survive Kraft’s bid — this much is obvious as I pick the last crumbs of Crunchie from the awkward fold in the bottom of the wrapping. But saving this one company from a foreign predator is not worth setting a precedent: one that allows a business secretary to interfere in the business of takeovers, based on a whim; one that overturns all notions of free trade; one that could damage our international reputation as a place that values fair business practices and minimum state intervention. These are more important British principles, alas, than a decent bar of chocolate.
I demur, of course. The whole point of taking another company over is lost if the combined result is less than the sum of the parts, especially by being "more" in the way of debt. For once, I am in total agreement with a union: Unite is entirely correct in believing that the tsunami of debt hitting the combined concern would hamper its prospects as compared to the relatively healthy state of today's Cadbury. You can do some Yankee-bashing by signing UNITE's petition to keep Cadbury independent, but a more worthwhile trip over to the latter's website should have you having a gander at the massive support site and the aforementioned "shareholder briefing" on the demerits of a takeover. A union site briefing investors, fancy that.
From the WSJ we also get word that the equally yucky yet storied Hershey is mulling its own bid to counter Kraft's offer. But, while it may up the ante, the main takeaway is that the health of Hershey's balance sheet is not good, either:
Hershey likely can't go as high as 850 pence, due to concerns about maintaining an investment-grade credit rating.
Samuel Weaver, a finance professor at Lehigh University who was in charge of valuing acquisitions at Hershey for 15 years until the late 1990s, said that Hershey should tread carefully in an acquisition of Cadbury. He said he worries that new debt would cripple a combined Hershey-Cadbury. He added that the combined company would have to allocate most of its cash flow to paying down debt, instead of funding a dividend payout and reinvesting in the company.
"It really gets ugly with the debt service going forward," Mr. Weaver said. He said he would counsel Hershey executives to allow the company's investment-grade rating to drop to one notch above speculative grade only if they had a three-year-plan to raise the combined company's credit rating.
My opinion is clear, then, on degustatory and financial grounds: This great British brand has nothing to gain from a Yankee takeover. As the chorus of populists the world over goes, "Yankee, go home!" This Curly Wurly ain't for you--it's in the air tonight.
19/1 UPDATE: Disgusting news--Cadbury accepts a revised Kraft offer at 840p. How my stomach churns! Ah well, there's always...Lindt.
20/1 UPDATE: The Guardian has a helpful graphic describing the revamped competitive landscape among the world's top four confectioners.
12/3 UPDATE: Now I remember--the reason why Cadbury sold in America tastes inferior to the British product is it's made by Hershey. With the Yanks now at the controls, I fear that poor taste may cross the Atlantic.
You're probably wondering why you're staring at yet another 80s video at what's purportedly the International Political Economy Zone, not Stuck in the 80s (a superb blog, BTW). Well, let me explain. There was this new wave band named Wang Chung from Britain that made it big in that decade. Their biggest hit was "Everybody Have Fun Tonight" which went to #2 on the US charts. In that song, there is a line which goes "Everybody Wang Chung Tonight." As you'll read below, the cyber-gestapo that the Politburo has sicced on Google is none other than, er, Wang Chen of the State Council Information Office. So it's not Wang Chung, but it's close enough for me.
The gist of Wang Chen's message is that China will not change its censorship practices--"self-discipline," they call it--in response to Google's antics. It's China's way or the highway. If you don't like it, then get the hell out of Dodge--I mean, Dalian. From the FT:
China’s government demands self-censorship – which it calls “self-discipline” – from internet companies. Although Mr Wang did not mention Google by name, his remarks were being seen as Beijing’s first response to the US internet company’s threat to exit the country...
Mr Wang also addressed concerns over cyberattacks but depicted China as a “victim” rather than a perpetrator as alleged by Google. “China is a victim of hackers and resolutely opposes hacking,” he said. “To maintain internet security, we need international co-operation and close co-ordination...”
Since late 2008, Beijing has been cracking down on online content in a campaign it says is aimed at erasing pornographic “and other harmful” content. Over this period, thousands of websites and blogs, including many featuring criticism of the government rather than pornographic material, were closed and thousands arrested. Several Chinese social media sites were shut and foreign ones such as YouTube, Facebook and Twitter blocked.
“The importance different countries attach to internet security is different,” Mr Wang said. “We must …, from the angle of national security, information security and cultural security, actively respond to the challenges in internet security and … find a path of internet development with Chinese characteristics.”
Google probably expected this response anyhow. I believe it's three main options now are as follows:
Close down its China operations as per the melodramatic statement;
Maintain a reduced presence that can still be re-expanded in the future (don't burn your bridges--this is most likely to happen IMHO);
Ask Uncle Sam to mediate by threatening China with a trade case over censorship (see the previous post on this possibility)
I'm of the opinion that diplomatic avenues will be tried before Google makes its decision on continuing operations. Whatever it chooses, you can bet that everybody will Wang Chen tonight.
1/15 UPDATE: See this interesting Danweicommentary extrapolating trends in online advertising in China that suggests prospects there aren't as rosy as some make them compared to those in the rest of the world.
1/16 UPDATE: In case you missed it, the White House says that it supports Google's actions to remove censorship filters. So much for "self-discipline"?
"The recent cyber intrusion that Google attributes to China is troubling and the U.S. government is looking into it," said White House spokesman Nick Shapiro. The administration is strongly opposed to the "illicit targeting of private email accounts for political reasons," he added. "We applaud Google's decision to discontinue censorship of search results on google.cn."
♠ Posted by Emmanuel in Music,Trade
at 3/19/2009 08:45:00 AM
I'm strapped for time but, in light of this place becoming the International Protectionist Economy Zone, here's my choice for this year's new official song. This one is off Jamaican disco goddess Grace Jones' classic album from 1980, Warm Leatherette. I was inspired to look for this song appropriately entitled "Bulls--t" on YouTube and, sure enough, here it is. I suggest they play it at the next G-20 meeting before proceedings get underway:
And if I wander down the wrong road, It's alright baby, just let me go, If I get tired of all those a--holes, It's alright cause' I want them to know.
I'm sick and tired of all this bulls--t, Rough s--t, same s--t
Juice protectionism, mining protectionism, trucking protectionism..I really am tired of these never-ending variations on a pathetic theme.
[WARNING: This is a rather morbid post. However, events recounted here are symptomatic of larger troubles. Those seeking uplifting tales amidst financial meltdown are advised to skip it.]
A few days ago, the Wall Street Journal suggested that Metallica's new album Death Magneticmay serve as the soundtrack to the subprime mess. Of course, I beg to differ: Megadeth's "Foreclosure of a Dream" is a far better soundtrack to this symphony of destruction. Now, two separate incidences have pointed me in the direction of yet another on-topic heavy metal evergreen, Ozzy Osbourne's "Suicide Solution." It seems downscaling the American dream of home ownership is hard for some, even if its affordability becomes out of the question due to past excesses. Note that the financial distress suffered by both parties aren't necessarily due to taking out subprime loans, but are related to the subprime crisis nonetheless.
With apologies to Robert Shiller, there is something darkly American about these displays of self-destructive behavior. First is the widely reported story of a 90-year old woman attempting to take her life after being threatened with foreclosure. She has since been allowed to keep her home:
Fannie Mae said it will set aside the loan of a woman who shot herself as sheriff's deputies tried to evict her from her foreclosed home. Addie Polk, 90, of Akron, Ohio, became a symbol of the nation's home mortgage crisis when she was hospitalized after shooting herself at least twice in the upper body Wednesday afternoon.
On Friday, Fannie Mae spokesman Brian Faith said the mortgage association had decided to halt action against Polk and sign the property "outright" to her. "We're going to forgive whatever outstanding balance she had on the loan and give her the house," Faith said. "Given the circumstances, we think it's appropriate..."
Neighbor Robert Dillon, 62, used a ladder to enter a second-story bathroom window of Polk's home after he and the deputies heard loud noises inside, Dillon said. "I was calling her name as I went in, and she wasn't responding," he said. He found her lying on a bed, and he could see she was breathing. He also noticed a long-barreled handgun on the bed, but thought she just had it there for protection. He touched her on the shoulder. "Then she kind of moved toward me a little and I saw that blood, and I said, 'Oh, no. Miss Polk musta done shot herself,' " Dillon said...
In 2004, Polk took out a 30-year, 6.375 percent mortgage for $45,620 with a Countrywide Home Loan office in Cuyahoga Falls, Ohio. The same day, she also took out an $11,380 line of credit. Over the next couple of years, Polk missed payments on the 101-year-old home that she and her late husband purchased in 1970. In 2007, Fannie Mae assumed the mortgage and later filed for foreclosure.
This unfortunate incident has been followed up by a UCLA MBA taking his life along with those of his wife, three kids, and mother-in-law. From the LA Times:
The 45-year-old Porter Ranch financial manager [Karthik Rajaran] who once made more than $1.2 million in a London-based venture fund had lost his job. His luck playing the stock market ran out. On Sept. 16, he bought a gun. He wrote two suicide notes and a last will and testament. And then, sometime between Saturday night and Monday morning, he killed his wife, mother-in-law and three sons, and took his own life.
"This is a perfect American family behind me that has absolutely been destroyed, apparently because of a man who just got stuck in a rabbit hole, if you will, of absolute despair, somehow working his way into believing this to be an acceptable exit," said LAPD Deputy Chief Michel Moore. "It is critical to step up and recognize we are in some pretty troubled times."
In a letter addressed to police, Rajaram blamed his actions on economic hardships. A second letter, labeled "personal and confidential," was addressed to family friends; the third contained a last will and testament, Moore said. The letter to police voiced two options: taking his own life, or killing himself and his entire family. "He talked himself into the second strategy," Moore said. "That that would be the honorable thing to do..."
When police entered the home in the gated, Spanish-style community, they first found the gunman's mother-in-law, Indra Ramasesham, 69, dead in a downstairs bedroom. His wife and three sons -- Krishna, 19, a sophomore at UCLA majoring in business economics; Ganesha, 12; and Arjuna, 7, all named after Indian gods and warriors -- were discovered in various upstairs bedrooms, all shot in the head, some with multiple gunshot wounds...
He also sold his house in 2006, a calculated decision even though his wife, a bookkeeper at a pharmacy, did not want to move, their former neighbors said. He sold the house for $750,000, making a sizable profit on a home the couple purchased in 1997 for $274,000.
"The market was going down and he wanted to get out before the bottom dropped out," Karns said. "I talked to him last December and he said, 'I feel I did a good thing by selling when I did.' "
Commentators (like me) often decry those taking out HELOCs and flipping homes as symptomatic of the housing bubble's excesses. What I gather is that the 90-year old woman took out a home equity loan while the LA businessman flipped his house. Something we need to figure out is the extent to which these folks are victims of the times or harbingers of them. If you look at the pictures on the LA Times site, also parked in the LA home are two hulking SUVs. As economists and others have suggested, the subprime crisis is likely to permanently alter the suburban (GMC Suburban?) way of life. Worse, events have demonstrated that Uncle Sam is in no position to help those who, like himself, have taken on excess debt. Some are not coping as well as hoped for, but the downsizing of America for past debt-fueled excesses is well underway.
♠ Posted by Emmanuel in Music
at 9/14/2008 12:11:00 PM
[After a long hiatus, I bring you...a weekend feature.] One of the ironic things about technological advancements in the realm of audio is that the quality of reproduced sound is going backward, not forward. The biggest culprit, of course, is the now-ubiquitous MP3 "lossy" format. The rise of portable digital players such as the iPod has made file formats which toss out musical information to save on disk space quite common. The victim in this process has been audio quality. Although I am not a dyed-in-wool "audiophile" by any means, I cannot listen to MP3s aside from naturally noisy environments such as on planes, trains, and automobiles where the benefits of portability are evident. If you ask me to sit down and listen to MP3s in a domestic environment, I will say it simply isn't possible. Compared to a regular CD, MP3 files are of comparably low quality.
Real audio enthusiasts are, of course, not quite pleased with CD sound. As many of them will tell you, the frequency range of CDs is constrained to 20Hz to 20kHz; the rest of the information is discarded. MP3s which toss away already limited musical information are even worse. Yes, there are higher resolution digital format such as SACD, but these have not gained much purchase in a time when MP3 files are deemed good enough by John Q. Public.
In a short span of time, both the Financial Times and the Wall Street Journal have come up with articles discussing a potential rebound in vinyl record sales. What is interesting to me from a political economy point of view is that foisting all these crappy compressed digital formats has not only given us poor audio quality but has also diminished record sales in recent times due to susceptibility to online piracy and whatnot. The most important point to me is this: CDs are not usually considered at all as collectibles with their teeny weeny cover art. Even in this day and age, records not CDs or any sort of digital media is prized by collectors. Fortunately, there are still those who keep the analogue flame alive. Apparently, not all consumer technologies are created equal. First, we have the FT:
Certainly, nostalgia plays a part. Many of the people now buying classic rock and pop reissues grew up during the 1960s and 1970s and are attracted to the idea of buying deluxe editions of the LPs they played in their youth. In the past few months three of the big four music companies – Universal Music, Sony BMG and Warner Music – have started re-releasing rock LPs from their back catalogues by artists such as Cream, Bob Dylan and The Doors, often remastered to bring out the best in the music and pressed on higher-quality vinyl. EMI is also re-releasing old LPs sporadically and several specialist labels have sprung up – among them, Classic Records in the US and Speakers Corner Records in Germany – licensing pop, jazz and classical music from the majors’ back catalogues and re-releasing it on audiophile-quality LPs.
Universal’s re-releases are coming out of Universal Music Japan, which has so far pressed 300,000 LPs across 100 titles – mostly rock but also including some classical and jazz. MinoruHarada, in charge of the project, says the records are aimed “especially at those baby-boomers who have started to retire, who have the time and money to spend on personal satisfaction and for whom vinyl connects with their earliest days of discovering music.”
But if it were only old fuddy-duddies still buying LPs, records would soon be heading the same way as the phonograph cylinder. In fact, younger music fans are helping keep the format alive. After CDs came along, dance music DJs did their bit, staying loyal to the 12in single and influencing fans to buy them. More recently, it has suddenly become fashionable among pop artists to release singles on 7in vinyl as well as in digital formats, often in limited editions that are seen as collectors’ items. The joke is, many of these singles are bought by youngsters who do not even own a turntable, but increasingly the records come with a coupon entitling the owner to a download of the same music.
So people are buying vinyl for different reasons. But one that refuses to go away is that many people believe analogue simply sounds better. This belief has grown only stronger as lifestyle changes and advances in technology have, paradoxically, led to a decline in sound quality – a retreat from hi-fi to lo-fi.
Think of it. Only a decade ago, people would sit in their living rooms listening to records or CDs played through expensive hi-fi components and speakers. Today, music has been squeezed out of the living room by visual media – the flat-screen television, satellite TV, home cinema and the games console – and is more often reproduced through iPod earphones or a pair of tinny speakers attached to a PC. According to GfK, a market research company, sales of hi-fi separates fell by more than 60 per cent, from £255m to £98m, in the five years to 2006, though the decline flattened out last year.
To vinyl purists, the rot set in with the introduction of the CD. Sound is naturally analogue, the argument goes, and vinyl preserves its natural character by recording it in an analogue format. But to turn it into a CD or other digital format, the sound has to be digitised. This means taking a series of snapshots of the analogue sound – in the case of the CD, at the rate of 44.1kHz, or 44,100 times per second. These snapshots are also taken with a predetermined degree of precision – in the case of the CD, at 16 bits.
The WSJ also chimes in on how the tide may be turning after LP sales hit a low point in 2006:
The 12-inch vinyl LP record -- in decline for the past two decades, clung to only by DJs, audiophile nerds and collectors -- is making a stand amid the digital revolution. World-wide sales of LP records doubled in 2007 (from three million to six million units) after hitting an all-time low in 2006, according to IFPI, the international recording industry trade association. Global sales of CDs dropped 12% in the same period, after having fallen 10% the previous year. Turntable sales in the U.S. increased more than 80% from 2006 to 2007 and continue to rise this year, according to the Consumer Electronics Association. "Last year and this year have been our busiest ever," says Kris Jones of London's Sounds of the Universe record shop, which sells more music on vinyl than on CD. "It's really crazy."
Record companies are looking for innovative ways to make people pay for music -- often music they already have in another format -- rather than get it free or at a reduced price over the Internet.
"There's a reaction against the commoditization of music" that downloading represents, says Mike Allen, a music industry consultant and former vice president of international marketing for record company EMI Group. "With vinyl there's something that has innate value -- a physical object."
Sound quality also plays a role. Vinyl fanatics have always maintained that LPs sound warmer and richer than digital formats. Some acts, like Beck, Tom Petty and Fleet Foxes, are playing to fans of both the old and new technology by including free CDs or MP3 downloads with vinyl versions of their albums.
I truly, madly, deeply do believe that this is a rather retro post in more ways than one: The well-respected currency commentator Simon Derrick of the Bank of New York suggests in the Financial Times op-ed below that, just like at the outset of the Asian financial crisis, many countries in the region are gearing up for currency intervention measures to once again defend their respective monetary units. In recent times, the US dollar has been taking it on the chin, and the worry has been more about declining Asian export competitiveness via a weakening dollar. More recently, however, Asian countries have become more concerned about domestic inflation. This sort of inflation has made more Asian countries think about wading into the currency markets again--not so much to defend their currencies from speculators a la 1997, but to control inflation circa 2008. On 21 May 2008, USD/KRW reached a recent high of 1057.60 before large-scale intervention kicked in [see marked area in above chart]. So, let us begin with the Economic Times' take on South Korea spending nearly $2B to prop up the won.:
South Korea intervened three times to support the sliding won on Tuesday and warned the currency may have fallen too far, as it wrestled with the problem of containing inflation without choking off economic growth. The Bank of Korea is under political pressure to cut rates to help spur growth in Asia's fourth-largest economy, and minutes from an April policy review showed two of the six board members favoured a rate cut for the first time since November 2004.
The central bank is resisting that pressure because inflation is at a four-year high, partly due to a surge in oil prices and won weakness, which is making imports more expensive. The currency, Asia's second-worst performer this year, may have fallen too far, Choi Jong-ku, head of the finance ministry's international bureau, told Reuters as news of the interventions began surfacing and pushed the won to a one-week high.
The foreign exchange authorities were seen selling almost $1 billion on Tuesday afternoon for won after dumping up to $800 million during the morning session, traders said. The won's rise on Tuesday revived expectations among investors that the central bank would have more room to cut interest rates at its next review on June 12.
Others said the Bank of Korea, hemmed in between rising inflation and the wishes of a growth-hungry new government, would want to avoid cutting rates for fear of stoking inflation. "The Bank of Korea's governor implied at his post-meeting comments in May that as long as the won turns weaker, it would be impossible for an interest rate cut in the near future," said Park Jong-yeon, fixed-income analyst at Woori Investment.
Annual inflation at 4.1 percent in April was above the central bank's 2.5 percent to 3.5 percent target range for a fifth straight month. "The won fell as oil prices jumped but we are worried that the won's fall might be excessive," Choi said. He also said the government was worried the won's fall was due to excessive herd behaviour in the currency market.
The intervention on Tuesday marks the second attempt to shore up the won in under a week. That pushed up the won to a session high of 1,034.9, matching the high on May 19, which was the strongest since May 8. The South Korean authorities spent an estimated $500 million last Wednesday when the won weakened past 1,050 per dollar to a 2-1/2-year low…=>
Analysts say massive intervention indicates the government is more concerned about inflation than growth but it still likely wants a relatively weak currency to support exports to help meet an ambitious economic growth target of 6 percent this year.
The government has repeatedly backed a weaker won to help boost growth in the export-focused economy, but analysts say fears that it will also lift inflation at home means the authorities will likely step in to prevent any nosedive. "The comment (by Choi) comes as the government needs to show action as a weaker won boosts the impact of surging oil prices on domestic demand," said Jeong My-young, an analyst at Samsung Futures Inc. "But the authorities will never allow the won to strengthen past the 1,000 (per dollar) again," she added.
Following on from this, the redoubtable Mr. Derrick suggests that other countries in the region have, ah, gone to the moon and back in similarly undertaking currency intervention:
Rumours of currency market intervention by a variety of Asian central banks are likely to gather pace, says Simon Derrick, strategist at Bank of New York Mellon. As well as reports that the Bank of Korea had re-entered the market to support the won, Mr Derrick points to talk of currency support action by the central banks of Taiwan, the Philippines and Indonesia. “Comments from a variety of central bank officials indicate that rising inflationary pressures were likely behind these operations,” he says. For example, Vietnam’s annual level of inflation leapt to 25.2 per cent in May from just 7.2 per cent just 12 months ago.
The causes of these sharp rises seem relatively understandable given the recent dramatic increases in food and energy costs globally. Hanoi, Mr Derrick points out, estimates that food prices this month jumped 67.8 per cent year-on-year. Adding to the woes of the central banks is the simple fact that the performance of many of these currencies against the dollar has tended to be a mirror image of the latest commodity price moves, he says. “In the absence of a sharp turnaround in commodity prices it seems reasonable to suppose that these currency pressures will only continue to mount. “As such it seems likely that the central banks of the region will continue their support operations as they try to stop the impact of rising commodity prices being exacerbated by sharp local currency losses.”
Dammit, it's like 1997 all over again, albeit for slightly different reasons. Cue up the Savage Garden, chick-a-Cherry cola, and pretend it's like old times. UPDATE: The Philippines has been spotted selling dollars to the tune of an estimated $150M. It's flashback time, baby. From Reuters...
The Philippine peso hit a seven-month low at 43.925 per dollar, down about half of a percent from Wednesday's close, as investors bought dollars after solid US durable goods data on Wednesday eased concerns over the US economy.
But intervention by the central bank to sell dollars helped limit the peso's further declines, traders said. "They (the central bank) were in the market this morning. I guess they sold the dollar at 43.85 and then at 43.90," said a trader in Manila. "I think the market is trying to target the 44 level, but the central bank does not want the peso to depreciate that fast and was trying to slow it down," he said. Some traders estimated the size of the intervention at $150 million.
Like in many other states, the state government of New Mexico is having difficulty raising revenues in this time of economic downturn in the US. Property taxes, sales taxes, and what else have you are bound to fall as economic activity drops. While surfing the Internet, I somehow came across this ad by the Tourism Department of New Mexico that I thought was pretty neat. In a clever allusion to the infamous Roswell UFO incident, it depicts two (rather funky looking) aliens playing golf [!] Being a marketing major from past studies, I of course appreciate a clever ad campaign. This ad campaign has already raised some controversy, although the proof should be in the pudding of state tourism revenues. One of the advantages of a weak dollar is that it makes the US an attractive travel destination. Certainly, New Mexico does not lack for tourist attractions. What raises a chuckle for me is that the state is now actively promoting tourism of Roswell and other alleged UFO sites. There must be many X-Files fans out there.
Here's a thought: if the US economy really descends into the dumps the way some have been predicting, maybe New Mexico will open Hangar 18 to the public for guided tours. Hangar 18, of course, is the alleged site at Wright-Patterson Air Force base where the bodies of the dead aliens from the Roswell incident are kept. Heck, maybe the tourist promotion folks of New Mexico can enlist Dave Mustaine to record a promotional track (I've never understood why the aliens in the Megadeth video are cute and cuddly while the Air Force general looks scary.) Hangar 18, I know too much...
♠ Posted by Emmanuel in Migration,Music
at 4/13/2008 02:02:00 AM
To put it mildly, Japan's demographic profile does not bode well for the future. The replacement rate for a country to maintain its current population is usually defined at the level of 2.1 children per woman. Like many industrialized countries, however, Japan is far from reaching that level. In 2007, the CIA World Factbook estimates that the fertility rate in Japan was a mere 1.23. This poses challenges for Japan in that its rapidly aging population is also one of the longest-living: According to the CIA World Factbook again, Japan has the third-longest life expectancy at birth at 82.02 years. Compounding matters, Japan remains very reluctant about allowing more migrants to perform necessary work in the country. Japan's situation goes like this:
Long life expectancy + low birth rate + reluctance to accept migrants = demographic disaster.
Now, this article from Reuters has been receiving a lot of attention from the techno-geek sites, but it is IPE to the core. To avoid having to allow gaijin (foreigners) in to take care of Japan's rapidly aging population, a Japanese thinktank proposes that robots ought to do more of the work in the future. I often see technological solutions to problems as necessary, but in this case, I think Japan would go overboard if this route were adopted. There are many migrants who would gladly perform the work if only Japan would let them. Try multiculturalism instead of techno-geekism for a change. In the meantime, we are ze robots...
Robots could fill the jobs of 3.5 million people in graying Japan by 2025, a thinktank says, helping to avert worker shortages as the country's population shrinks. Japan faces a 16 percent slide in the size of its workforce by 2030 while the number of elderly will mushroom, the government estimates, raising worries about who will do the work in a country unused to, and unwilling to contemplate, large-scale immigration.
The thinktank, the Machine Industry Memorial Foundation, says robots could help fill the gaps, ranging from microsized capsules that detect lesions to high-tech vacuum cleaners. Rather than each robot replacing one person, the foundation said in a report that robots could make time for people to focus on more important things. Japan could save 2.1 trillion yen ($21 billion) of elderly insurance payments in 2025 by using robots that monitor the health of older people, so they don't have to rely on human nursing care, the foundation said in its report. Caregivers would save more than an hour a day if robots helped look after children, older people and did some housework, it added. Robotic duties could include reading books out loud or helping bathe the elderly.
"Seniors are pushing back their retirement until they are 65 years old, day care centers are being built so that more women can work during the day, and there is a move to increase the quota of foreign laborers. But none of these can beat the shrinking workforce," said Takao Kobayashi, who worked on the study. "Robots are important because they could help in some ways to alleviate such shortage of the labor force."
The current fertility rate is 1.3 babies per woman, far below the level needed to maintain the population, while the government estimates that 40 percent of the population will be over 65 by 2055, raising concerns about who will look after the graying population.
Kobayashi said changes was still needed for robots to make a big impact on the workforce. "There's the expensive price tag, the functions of the robots still need to improve, and then there are the mindsets of people," he said. "People need to have the will to use the robots."
Levicitus 25:23-24 states "The land is mine and you are but aliens and my tenants. Throughout the country that you hold as a possession, you must provide for the redemption of the land." In the Holy Book, there are numerous other references to the concept we now understand as "environmental stewardship." Something that makes me proud to be a Catholic--with a name like "Emmanuel" no one is going to mistake me for an Aum Shinrikyo acolyte--is the very progressive and pragmatic stance the Holy See has taken to environmental matters. It will famously install solar cells on the roof of the Vatican in an attempt to lessen its dependence on fossil fuels. And now, Reutersreports that the #2 man at the Vatican is keen on classifying ecological offenses as sins. Yes, 80s fans, being an enviro-degenerate, it's a sin.
Elsewhere in the article, Girotti discusses confession. I think both go hand in hand: "Forgive me father for I have sinned. During the month of January, my carbon footprint was reprehensible, further endangering people living in flood-prone regions of His earth like Bangladesh..." Really, it is no surprise to me that folks like (the rather earthly) Tony Blair would like to miss out on the benefits of the religion. Believe it or not, Catholicism is a very forward looking faith:
[Archbishop Gianfranco] Girotti, in an interview headlined "New Forms of Social Sin," also listed "ecological" offences as modern evils.
In recent months, Pope Benedict has made several strong appeals for the protection of the environment, saying issues such as climate change had become gravely important for the entire human race.
It has installed photovoltaic cells on buildings to produce electricity and hosted a scientific conference to discuss the ramifications of global warming and climate change, widely blamed on human use of fossil fuels.
You must be thinking, "this guy has really lost it," but no. The eminently respectable Menzie Chinn of Econbrowser raised the comparison between the current subprime contagion and the savings and loan fiasco of the early nineties. Way back during my college years, I remember listening to a cassette tape (remember those?) of the great thrash metal band Megadeth. Fronted by someone who was kicked out of Metallica for taking too many controlled substances, Dave Mustaine, Megadeth nonetheless made several memorable tunes on its commercial breakthrough Countdown to Extinction. I still have the tape somewhere although it's probably worn out from the number of times I played it on the car stereo.
Anyway, the song whose video I excerpt above refers to regular folks getting foreclosed in the US of A in the wake of the S&L crisis. The clip dates to 1992, I believe. The visual motif in "Foreclosure of a Dream" is of everyday people being kicked out of their houses who end up sitting on couches they removed from their former residences. It works for me as the video is very well made: the farmer and his wife at the start of the video, for instance, are a clever visual pun on Grant Wood's American Gothic. An especially poignant picture is of the African-American mother and child sitting outside of the White House. It is widely noted that minorities have taken a disproportionate share of subprime loans, so perhaps Megadeth was prescient of Bush's "ownership society."
UPDATE 1: Fellow traveler Andrew Leonard at Salon has mentioned this post. Of course Megadeth could not have foreseen the subprime mess way back in 1992. However, the parallels are striking and I've decided to further illustrate how the lyrics of the song fit with what is going on today. Consider that McCain was part of the Keating Five Lincoln Savings & Loan Association scandal then, and he is running for the Oval Office now. Meanwhile, the S&L crisis blew up with George Bush at the helm, now it's W's turn.
UPDATE 2: At the song's start, there's a spoken into that goes "Charges of fund misappropriation are leading to top-ranking officials...sources say that a major restructuring of the department could be in order." Well, just out is news that Housing and Urban Development (HUD) Secretary Alphonso Jackson is stepping down over--you guessed it--fund misappropriation. The only question left is whether Jackson will be tossed in the clank. Really, does anyone needs more evidence that this band was prescient? Megadeth rules!
The lyrics are quite pertinent for today's situation as well: More borrowed money, more borrowed time, indeed. Until all is lost, personal Holocaust, foreclosure of a dream...
Rise so high, yet so far to fall [US homeowner's equity falls to postwar low]
A plan of dignity and balance for all [Bush's "ownership society"] Political breakthrough, euphoria's high More borrowed money, more borrowed time [the $168B economic stimulus package] Backed in a corner, caught up in the race Means to an end ended in disgrace [CEOs of Wall Street Banks testify on salaries] Perspective is lost in the spirit of the chase
Foreclosure of a dream
Those visions never seen [foreclosure rates have hit a record high in the States] Until all is lost Personal Holocaust Foreclosure of a dream
Barren lands that once filled a need
Are worthless now, dead without a deed Slipping away from an iron grip Nature's scales are forced to tip The heartland cries, loss of all pride To leave ain't believing, so try and be tried Insufficient funds, insanity, and suicide
Now with new hope some will be proud [the Orwellian "Hope Now Alliance"]
This is no hoax, no one pushed out Receive a reprieve and be a pioneer [Fed wants lenders to forgive some mortgages] Breaking new ground on a new frontier New ideas will surely get by No deed or dividend, some may ask "Why?" You'll find the solution, the answer's in the sky
Tis perhaps appropriate that my fondness for historically informed performances (HIP) of classical music ties into international political economy for two obvious reasons. First, with most music commissioned for religious rather than secular purposes during past eras, it highlights how music played a role in then-common agglomerations of church and state. Second, music was often commissioned for momentous occasions such as feting nobility for obviously political purposes.
So, instead of boring you with a roundup of opinions on whether the impending US technical default matters or not--you can do that yourselves and I can't say my opinion is necessarily more accurate than anyone else's--I bring you music and history. (The IPE Zone values cultural sophistication, historical referents, and attitudes of elegant despair on all epochs of subprime globalization.) You see, dear readers, one of my favourite performances remains the Academy of Ancient Music under Andrew Manze presenting Vivaldi's Concert for the Prince of Poland. The press blurb for the recording goes like so:
