Thursday, November 3, 2016

Greece – Still a Mess

Der Spiegel’s interesting piece on Greek Prime Minister Alexis Tsipras:
“The people's love of Tsipras has turned into anger. Because of their diminishing salaries, air-traffic controllers, doctors and teachers are standing up to the government. About four weeks ago, retirees tried to topple the police buses, their faces full of anger and disappointment. When police officers drove the seniors back with tear gas, an outcry swept across the country: Hadn't Tsipras promised that things like this would never happen again, they asked?
Alexis Tsipras, the rebel, and his left-wing Syriza Party took power in January 2015 with the purpose of ending the austerity program and giving the Greeks their dignity back. He wanted to negotiate a reduction in Greece's debts and he called for an end to austerity policies. After his election, people danced in the streets.
In the time that has lapsed since, however, Tsipras has broken most of his promises. In August 2015, he accepted a third relief program from the creditors, and received billions in exchange for Greek spending cuts. Now he's raising taxes, cutting pensions, selling airports and ports. The Greek economy is still in dire straits, the unemployment rate is at 24 percent and further savings measures are still to come.”

Zimbabwe Shifts Towards a Cashless Economy

A useful lesson in monetary economics from the NYTIMES:
A Cashless Economy in Zimbabwe? With Little Cash, There’s Little Choice
http://www.nytimes.com/2016/11/04/world/africa/zimbabwe-robert-mugabe-cash-debit-cards.html

Wednesday, November 2, 2016

Satellite Launchers and Trade Barriers

Trade protectionism inevitably leads to higher costs and inefficiencies –
“In 2005, [the US] imposed an export moratorium on satellites for Indian launch.
The timing was no accident. In 2005, SpaceX was building its Falcon 1 rocket, which was designed to carry small satellites. The ban even came to be known as the "SpaceX Agreement." Problematically, though, the Falcon 1 had only one commercial launch before it was retired in 2009. At the time, the small satellite boom hadn't yet taken off, and SpaceX didn't believe there was a commercial justification for the rocket. (It's now scrambling to correct that mistake.)
Since then, no other U.S. company has offered a rocket for small satellite launches (though some are reportedly in the works), even as demand has surged. That leaves American satellite companies with few options. The U.S. Trade Representative has handed out occasional waivers from the moratorium. And a European government consortium now offers its own small satellite launch vehicle, for a hefty fee. But a far cheaper and more reliable option -- going to India -- remains off the table.”

Tuesday, November 1, 2016

Democracy – Pros and Cons

An entertaining and timely piece from the New Yorker:
THE CASE AGAINST DEMOCRACY: If most voters are uninformed, who should make decisions about the public’s welfare? By Caleb Crain
“Roughly a third of American voters think that the Marxist slogan “From each according to his ability to each according to his need” appears in the Constitution. About as many are incapable of naming even one of the three branches of the United States government. Fewer than a quarter know who their senators are, and only half are aware that their state has two of them.
Democracy is other people, and the ignorance of the many has long galled the few, especially the few who consider themselves intellectuals….
It would be much safer, Plato thought, to entrust power to carefully educated guardians….
A more practical suggestion came from J. S. Mill, in the nineteenth century: give extra votes to citizens with university degrees or intellectually demanding jobs.”


E.B. Whites’ classic description of democracy published in the year 1943:
http://www.newyorker.com/books/double-take/e-b-white-on-the-meaning-of-democracy
“Democracy is the recurrent suspicion that more than half of the people are right more than half of the time.”

Top Economists on the US Presidential Election

As noted by the WSJ:
“A group of 370 economists, including eight Nobel laureates in economics, have signed a letter warning against the election of Republican nominee Donald Trump, calling him a “dangerous, destructive choice” for the country…
The letter is notable because it is less partisan or ideological than such quadrennial exercises, and instead takes issue with Mr. Trump’s history of promoting debunked falsehoods.”

Politicization of Monetary Policymaking

Otmar Issing (one of the key players in the creation of the Euro) notes:
https://www.project-syndicate.org/commentary/central-bank-independence-jeopardized-by-otmar-issing-2016-11
“The failure of elected politicians to act appropriately – particularly in some eurozone countries – has turned central banks into the “only game in town.” And this is turning out to be less a boon to their prestige than a threat to their independence.”

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