My latest article, The Economist lowers the bar on low expectations, is up at Da Tech Guy Blog.
Archive for the ‘Economist’ Category
The Economist’s op-ed looks at the factors why Brazil’s economy grew by only 0.9% in 2012:
- The world’s most burdensome tax code
- Absurdly generous pensions
- Spending only 1.5% of GDP on infrastructure, compared with a global average of 3.8%
- Gross public debt has climbed to 60-70% of GDP
The Economist recommends that Brazil do three things:
It needs to rediscover an appetite for reform by reshaping public spending, especially pensions.
. . .
Second, it must make Brazilian business more competitive and encourage it to invest
. . .
Third, Brazil urgently needs political reform
None of this is likely to happen; Carlos Alberto Montaner writes
“All you have to do is read the records of the São Paulo Forum and observe the conduct of the Brazilian government,” he said. “The friends of Luis Inácio Lula da Silva, of Dilma Rousseff and the Workers Party are the enemies of the United States: Chavist Venezuela, first with (Hugo) Chávez and now with (Nicolás) Maduro; Raúl Castro’s Cuba; Iran; Evo Morales’ Bolivia; Libya at the time of Gadhafi; Bashar Assad’s Syria.
“Cuban influence in Brazil is covert but very intense. José Dirceu, Lula da Silva’s former chief of staff and his most influential minister, had been an agent of the Cuban intelligence services. In exile in Cuba, he had his face surgically changed. He returned to Brazil with a new identity (Carlos Henrique Gouveia de Mello, a Jewish merchant) and functioned in that capacity until democracy was restored. Hand in hand with Lula, he placed Brazil among the major collaborators with the Cuban dictatorship. He fell into disgrace because he was corrupt but never retreated one inch from his ideological preferences and his complicity with Havana.”
Yesterday commenter Marcos stated,
please write more about the Forum of Sao Paulo, the organization created by Brazil’s Lula and Castro to change Latin America into an united Marxist region. Brazil has totally fallen to Marxism and is now engaged in the help of all marxist partners.
Brazil has already received the first of 4000 Cuban physicians who will come to indoctrinate Brazilian poor people on the wonders of communism. These guys are not even certified as doctors and are slaves who never see their salaries (money goes directly to Fidel).
Add to that the immense, structural corruption, and the drug trade from fellow Foro member Bolivia.
Back in 2009 The Economist had a picture of the Corcovado Christ as a rocket. Now the rocket is on a crash course:
Is The Economist’s image a good summation of the country’s situation?
My friends at HACER announce,
The Hispanic American Center for Economic Research (HACER) and the Fundación para el Progreso “Jean Gustave Courcelle-Seneuil” of Chile, joined efforts to publish and promote “Interventionism and Misery: 1929-2008″ a book devoted to understand the nature of past and future economic crises around the world. With a perspective of Austrian economics, Axel Kaiser explains the causes of the Great Depression in 1929, the crisis that started in 2008, the role of statism in the road to ruin and the key importance of the gold standard and capitalism for a prosper future.
Ralph J. Benko says in the prologue: “Interventionism and Misery: 1929-2008 by Axel Kaiser is an important book. Economics has become, in Kaiser’s apt word, an astrology. The more miserable grow our economies the more pretentious grow professional economists. [...] Statism is based on faith, not reason. The Black Stone – the primordial artifact – of the Kaaba of canonical economics today is the claim that the free market somehow caused, and failed to cure, the Great Depression. Axel Kaiser directly and capably critiques this, the very foundational myth upon which statism, that most modern of religions, is built. He capably strips away much of the veneer of theoretical legitimacy upon which statism depends.”
Explaining the debt in beer terms we can all understand,
The national debt jumped by $72 billion on Tuesday even as the Republican-led U.S. House of Representatives passed a continuing resolution to fund the government for just three weeks that will cut $6 billion from government spending.
If Congress were to cut $6 billion every three weeks for the next 36 weeks, it would manage to save between now and late November as much money as the Treasury added to the nation’s net debt during just the business hours of Tuesday, March 15.
Congress would need to cut spending by $6 billion every three weeks for approximately the next six and a half years (338 weeks) just to equal the $676.3 billion the debt has increased thus far this fiscal year.
Having endorsed Obama, The Economist is now having regrets:
Despite his resounding electoral victory, his solid majorities in both chambers of Congress and the obvious goodwill of the bulk of the electorate, Mr Obama has seemed curiously feeble.
Empty posts, weak policies
There are two main reasons for this. The first is Mr Obama’s failure to grapple as fast and as single-mindedly with the economy as he should have done. His stimulus package, though huge, was subcontracted to Congress, which did a mediocre job: too much of the money will arrive too late to be of help in the current crisis. His budget, though in some ways more honest than his predecessor’s, is wildly optimistic. And he has taken too long to produce his plan for dealing with the trillions of dollars of toxic assets which fester on banks’ balance-sheets.
The failure to staff the Treasury is a shocking illustration of administrative drift. There are 23 slots at the department that need confirmation by the Senate, and only two have been filled. This is not the Senate’s fault. Mr Obama has made a series of bad picks of people who have chosen or been forced to withdraw; and it was only this week that he announced his candidates for two of the department’s four most senior posts. Filling such jobs is always a tortuous business in America, but Mr Obama has made it harder by insisting on a level of scrutiny far beyond anything previously attempted. Getting the Treasury team in place ought to have been his first priority.
Second, Mr Obama has mishandled his relations with both sides in Congress. Though he campaigned as a centrist and promised an era of post-partisan government, that’s not how he has behaved. His stimulus bill attracted only three Republican votes in the Senate and none in the House. This bodes ill for the passage of more difficult projects, such as his big plans for carbon-emissions control and health-care reform. Keeping those promises will soon start to bedevil the administration. The Republicans must take their share of the blame for the breakdown. But if Mr Obama had done a better job of selling his package, and had worked harder at making sure that Republicans were included in drafting it, they would have found it more difficult to oppose his plans.
And don’t get me started on foreign policy.
James points out,
Obama, alas, is the worst of both worlds, having neither gubernatorial experience nor much Washington experience. He’s been an incredibly talented dilettante, getting elected to one job and then the next without learning the ropes. He’s a fast learner and will get the hang of it but, to come back to the Hillary Clinton quip that starts the Economist piece, “the Oval Office is no place for on-the-job-training.” Except, as already noted, that it usually is.
But now we’re hearing “buyer’s regret” from The Economist – and it’s not even 100 days yet. Mark Steyn thinks it’s going to be a long four years:
This is the point: The nuancey boys were wrong on Obama, and the knuckledragging morons were right. There is no post-partisan centrist “grappling” with the economy, only a transformative radical willing to make Americans poorer in the cause of massive government expansion. At some point, The Economist, Messrs Brooks, Buckley & Co are going to have to acknowledge this. If they’re planning on spending the rest of his term tutting that his management style is obstructing the effective implementation of his centrist agenda, it’s going to be a long four years.
In The Economist, an article about ethanol, Fuel for friendship
Firms around the world are trying to make biofuel out of everything from trees to cooking oil. To make ethanol from corn or wheat, as Americans and Europeans tend to do, distillers must first convert the starch in those crops into sugars. But Brazilian distillers dispense with this expensive step, as they use sugarcane as a feedstock. So Brazil can produce ethanol for 22 cents a litre, compared with 30 cents a litre for corn-based ethanol, according to Icone, a Brazilian think-tank. That makes it cheaper than petrol, and therefore lucrative for farmers without subsidies.
U.S. sugar is too expensive to convert to fuel, thanks to a complicated system of tariffs and quotas that keeps the U.S. price of sugar artificially high, and the US can’t produce enough sugar to meet an increasing demand in ethanol. Those are two reasons why import it.
Since Brazil’s ethanol has too much water (and is quite similar to rum), the way to get around this tarriff is for Brazil to ship its ethanol to dehidration factories in one of two dozen Caribbean countries that are exempt from the tarriff, and then take it to the US by tanker where a gasline refiner makes it undrinkable and blends it with gasoline. The blended ethanol is then shipped to gas stations.
The lobbyists and the politicians are to blame for this tarrif:
The ethanol industry not only receives billions of dollars in subsidies each year, but governmental protection from international competitors as well.
But back to The Economist,
Brazil is not the only country in Latin America that sees great promise in ethanol. Colombia now has five distilleries amid the sugarcane fields of the Cauca Valley, which produce 360m litres a year. Two more are under construction elsewhere. These producers are guaranteed a market, since regulations oblige fuel merchants to mix ethanol into petrol. By 2009 the required blend will be 10% ethanol and will gradually rise to 25% thereafter. Costa Rica has a similar policy, and Panama is contemplating one.
Indeed, since sugarcane is grown throughout the region, most Latin American countries could benefit. A recent study from the Inter-American Development Bank argued that replacing 10% of Mexico’s petrol consumption with locally refined ethanol would save $2 billion a year and create 400,000 jobs. Several Caribbean governments hope that the ethanol boom could help revive their ailing sugarcane farms.
The greatest lure would be access to the American market. Various Central American, Caribbean and Andean countries can already send ethanol to America tariff-free, thanks to concessionary trade agreements. Maple, an American energy investment group, plans to spend $120m on an ethanol plant in Peru to take advantage of such a waiver. A pipeline running out into the nearby Pacific Ocean will deliver the plant’s output directly to tankers bound for America. Proponents of the project say it will create 3,200 jobs. If all goes well, exports could reach 120m litres a year by 2010, and perhaps as much as 400m in the more distant future.
The United States, for its part, has several reasons to encourage ethanol production in Latin America. For one thing, it will need seven times more of the stuff than it currently produces to meet Mr Bush’s 35 billion-gallon target. There simply is not enough spare land in America to grow adequate feedstock for such an amount, unless scientists find a way to make ethanol cheaply from abundant materials such as wood or grass. Although Mr Bush’s ultimate goal is energy independence, he would presumably prefer to be dependent on ethanol from friendly countries such as Brazil and Colombia than on oil from hostile places like Iran and Venezuela.
An ethanol boom in Latin America would also attract investment to rural areas and create lots of jobs. That might help to reduce the steady northward stream of illegal immigrants. It would certainly burnish America’s image, and stem support for anti-American tub-thumpers such as Venezuela’s Hugo Chávez. He has won friends throughout the region by selling oil cheaply. By sharing technology and promoting investment in ethanol, America would also be reducing Latin America’s fuel bill. If it bought lots of ethanol from its neighbours, it would be providing them with a lucrative export of their own.
Secretary of State Condoleezza Rice and her Brazilian counterpart signed an energy agreement making ethanol an internationally traded commodity.
This can be a first step that the US takes to unleash a new area of prosperity in Latin America. Let’s create free markets, and create wealth by abolishing all farm subsidies and trade barriers with Latin American countries that are willing to provide property rights, democracy and the rule of law for their citizens.
President Bush went to Brazil and will also visit Uruguay, Colombia, Guatemala, and Mexico. Robert Mayer has more thoughts on the subject.
Update: Bush promotes trade with Uruguay
Uruguay is keen to sign free trade deals with the US, even if it means leaving the Mercosur trade bloc.
In yesterday’s Blog Talk Radio show with WC of The Gathering Storm, I mentioned several books:
Journalists Plinio Apuleyo Mendoza, Carlos Alberto Montaner, and Alvaro V. Llosa’s
Peruvian economist Hernando de Soto has written several books that I highly recommend on the subject of property rights, rule of law, capital creation and free markets:
As the NYT won’t listen to my very assertive requests to cancel my subscription, I browsed through the contents of this morning’s edition and found their annual Sunday Magazine obituary issue, quaintly named “The Lives They Lived”.
The front page shows in neon signs JUNE ALLYSON EUGENE LANDY STEVE HOWE and a dozen others. Before looking inside, I said to The Husband, who was just getting out of bed and had walked into the kitchen for a glass of water,
I bet you $5 they don’t mention Jeane Kirkpatrick.
The Husband might have been half-asleep but is very familiar with the NYT editorial criteria.
He declined to wager. Darn.
Sure enough, no Jeane Kirkpatrick. Instead, they had Anais Nin’s “other husband”, and the Naked Guy. Can’t say I had heard of those two before.
At least The Economist showed more grace: in their year-end “Special Holiday Double Issue”, they have her obituary, along with op-ed comment (“Certain sentences from her most famous article, “Dictatorships and Double Standards” – written on her summer holiday in France, published in Commentary magazine in November 1979 – now induce a sigh.” [link added], and we all know how deeply The Economist has been sighing):
Her actual job was ambassador to the United Nations, the first woman to do it. She found the UN a dangerous place, the work miserable, and Security Council debates “more like a mugging than anything else”. There, too, her shade seemed to haunt the corridors in the days before she died. Her style at the General Assembly was a model for John Bolton’s, confrontational and blunt to a degree, and the present ambassador, as he resigned amid general hooting, candidly acknowledged his debt to her. But times were different then. Mrs Kirkpatrick represented an America that had become, under Jimmy Carter, an apologetic and unconfident country. She saw no need to compromise or conciliate on anything, but instead came out furiously fighting against the “expansionist” Soviet Union and its client states. “There is…only one revolutionary society in the contemporary world,” she cried in 1984, “and that is our society.”
America still remains the one revolutionary society in the contemporary world. Thank you, Ambassador Kirkpatrick.
Cinnamon Stillwell writes about how the Experts Discover Men And Women Are Different! Cinnamon explains,
The manly virtues include character, confidence, honor, inner strength, pride, responsibility, loyalty, generosity, industry and dignity.
The antidote to the trans confusion, male girlfriends, and weepie guys? The Discovery Channel Guys, of course! Not one wuss in the lot – and Bear Grylls looks great without a shirt on.
Unfortunately he waited to take off his shirt until he was adrift on the Pacific Ocean, but still…