It will NOT get cooler

The Copenhagen global warming conference involved 193 nations getting together to discuss the threat that global warming poses to our planet and what can be done about it. The goal was to create a global agreement that extended and expanded the Kyoto Protocol so that a global organization could influence and monitor all nations' efforts to reduce their CO2 emissions.

Global warming believers did not get their way, either in extending the Kyoto agreement or in forming any global organization to tell all of the world's people how to lead their lives. But developing nations did get something:

• A promise of support for $30 billion over the first three years and a goal of growing it to $100 billion annually by 2020.
• The developing nations saw climate change as an enormous financial bonanza if, under the banner of the environment, they could get wealthy nations to transfer wealth to them.
• The wealthy nations of course saw this as a trap: Why would they want to depress their economic growth by giving money to developing nations?
• The truth of the Copenhagen agreement is that developing countries want cash from other countries with few strings attached.

So the final Copenhagen deal did not establish greenhouse gas emission targets or specifically address how nations must limit temperature increases to no more than 2 degrees Celsius, but it did agree that CO2 emissions could be measured, reported and verified by . . . well, someone. That, in China's terms, means "developed countries must take the lead" in making emission cuts and providing financial and technical support for developing countries.

In truth, the world dodged a bullet in Copenhagen. There could have been significant damage to many nations' economies if the warming alarmists' full agenda had been adopted. But of course the game has not ended. President Obama, Congress and the Environmental Protection Agency all seem committed to regulating our behavior and consumption under the guise of addressing a crisis that is not a crisis. They will do so in a way that will not meaningfully reduce global temperatures, but will substantially hurt the economies and opportunities of the world's people.

Global warming - does anyone care?

Free Trade in 2010

As the United States dithers, East Asia has moved forward on market liberalization with a vengeance, creating the biggest free trade zones seen in years.

Largely ignored, the arrival of the world's third-biggest free trade area has been formed.

• China and Asia's Tigers -- the Association of Southeast Asian Nations, scrapped 7,000 different tariffs to form a $200 billion open market for about 2 billion consumers, one-third of the world's population.
• Jan. 1 also heralded another ASEAN free-trade pact with mighty India, ending tariffs on 4,000 products staggered through 2016; this deal will expand a $50 billion market for 1.5 billion consumers into something even bigger.
• ASEAN also signed off on free trade with Australia and New Zealand, tacking on another $50 billion market to expand for their 600 million consumers.
• It follows ASEAN's Dec. 1 agreement with Japan, which created a $240 billion market for 670 million.
• In addition, Thailand and South Korea completed the last step of 2007's ASEAN-Korea pact, finalizing expansion of the zone to a $72 billion market for 600 million.

ASEAN's six freest members, Thailand, Indonesia, Singapore, Philippines, Malaysia and Brunei , even enacted a free-trade deal among themselves on Jan. 1, ending tariffs on goods sold to each other, freeing a $60 billion market for 500 million consumers.

All this points to something major: While the Obama administration has put its energy into trade wars with China, enacting punitive tariffs on steel, tires, nylon, paper, and other goods and has signed no new pacts in 2009, free trade is marching on without the United States

Crime

The recession of 2008-09 has undercut one of the most destructive social theories that came out of the 1960s: the idea that the root cause of crime lies in income inequality and social injustice. As economies started shedding jobs in 2008, criminologists and pundits predicted that crime would shoot up, since poverty, as the "root causes" theory holds, begets criminals. Instead, the opposite happened. Over millions of lost jobs later, crime has plummeted to its lowest level since the early 1960s. The consequences of this drop for how we think about social order are significant, says Heather Mac Donald, a contributing editor at the Manhattan Institute's City Journal.

In late 2008, the New York Times urged President Barack Obama to crank up federal spending on after-school programs, social workers, and summer jobs. "The economic crisis," the paper's editorialists wrote, "has clearly created the conditions for more crime and more gangs -- among hopeless, jobless young men in the inner cities."

Even then crime patterns were defying expectations. And by the end of 2009, the purported association between economic hardship and crime was in shambles, says Mac Donald. According to the FBI's Uniform Crime Reports:

• Homicide dropped 10 percent nationwide in the first six months of 2009.
• Violent crime dropped 4.4 percent and property crime dropped 6.1 percent.
• Car thefts are down nearly 19 percent.

The crime plunge is sharpest in many areas that have been hit the hardest by the housing collapse, says Mac Donald:

• Unemployment in California is 12.3 percent, but homicides in Los Angeles County, the Los Angeles Times reported recently, dropped 25 percent over the course of 2009.
• Car thefts there are down nearly 20 percent.

The recession crime free fall continues a trend of declining national crime rates that began in the 1990s, during a very different economy. The causes of that long-term drop are hotly disputed, says Mac Donald:

• An increase in the number of people incarcerated had a large effect on crime in the last decade and continues to affect crime rates today.
• The number of state and federal prisoners grew fivefold between 1977 and 2008, from 300,000 to 1.6 million.

Source: Heather Mac Donald, "A Crime Theory Demolished," Wall Street Journal, January 4, 2010.

Time Flies

My last post was April 30, 2009. Talk about time flying. It was a busy and productive year and I suspect this year will be no different.

Going Viral

Swine flu isn't only a health emergency. It's a test for how we're going to organize the 21st century. Subsidiarity works best, says New York Times columnist David Brooks.

The response to swine flu suggests that a decentralized approach is best. This crisis is only days old, yet we've already seen a bottom-up, highly aggressive response.

In the first place, the decentralized approach is much faster, says Brooks:
- Mexico responded unilaterally and aggressively to close schools and cancel events.
- The United States has responded with astonishing speed, considering there are still few illnesses and just one hospitalization.

The decentralized approach is more credible:
- In times of crisis, people like to feel protected by one of their own.
- They will only trust people who share their historical experience, who understand their cultural assumptions about disease and the threat of outsiders and who have the legitimacy to make brutal choices.

If some authority is going to restrict freedom, it should be somebody elected by the people, not a stranger.

Finally, the decentralized approach has coped reasonably well with uncertainty:
- It is clear from the response, so far, that there is an informal network of scientists who have met over the years and come to certain shared understandings about things like quarantining and rates of infection; it is also clear that there is a ton they don't understand.
- A single global response would produce a uniform approach; a decentralized response fosters experimentation.

The bottom line is that the swine flu crisis is two emergent problems piled on top of one another, explains Brooks. At bottom, there is the dynamic network of the outbreak. It is fueled by complex feedback loops consisting of the virus itself, human mobility to spread it and environmental factors to make it potent. On top, there is the psychology of fear caused by the disease. It emerges from rumors, news reports, Tweets and expert warnings.

The correct response to these dynamic, decentralized, emergent problems is to create dynamic, decentralized, emergent authorities: chains of local officials, state agencies, national governments and international bodies that are as flexible as the problem itself, says Brooks.

Source: David Brooks, "Globalism Goes Viral," New York Times, April 28, 2009.

For text:
http://www.nytimes.com/2009/04/28/opinion/28brooks.html

This is not 1918

The swine flu outbreak in Mexico is disturbing, and fears of a pandemic are justified. But the best advice on Monday came from President Barack Obama. "This is obviously the cause for concern and requires a heightened state of alert," Obama noted. "But it's not a cause for alarm."

As of Monday afternoon, swine flu was believed to have killed 149 people in Mexico and sickened more than 1,600.

There have been at least 40 cases in the United States, including 28 at a high school in New York City.

The outbreak in Mexico recalled the horrific worldwide pandemic that killed 50 million at the close of World War I and sickened millions more. But this is not 1918. In the 91 years since those terrible days, the understanding of infectious diseases has grown far more sophisticated.

This is a serious situation and alarming because so little is known, including whether the virus is mutating into a more lethal form. But state and the local health departments appear to be well prepared if an outbreak occurs.

IS CORRUPTION EFFICIENT GREASE?

A cure for a country beset by government bureaucracy and incompetence may be some old-fashioned corruption. In countries with robust institutions, corruption decreases efficiency. But in weak states, graft and bribes can "grease the wheels" by enabling intelligent investors to circumvent a crooked, incapable government and invest money directly in the private sector, say researchers.

Testing whether corruption can be viewed as "efficient grease in the wheels of an otherwise deficient institutional framework" the researchers analyzed the interaction between aggregate efficiency, corruption and other dimensions of governance for a panel of 54 countries. They found:

-Both the weak and strong forms of the grease the wheels hypothesis are present.

-Corruption is always detrimental in countries where institutions are effective, but that it may be positively associated with efficiency in countries where institutions are ineffective.

-For each of the five dimensions of governance taken into account, there is evidence of the strong grease the wheels hypothesis in at least one estimation.

Thus, they find evidence of the grease the wheels hypothesis.

A possible policy implication of these results might be that countries plagued with a very inefficient institutional framework may benefit from letting corruption grow. However, this interpretation is extreme and risky. A country that would let corruption frolic may find itself stuck later on with an even worse global institutional framework, and thus end up in a bad governance/low efficiency trap.

Encouraging countries to fight corruption while also striving to improve other aspects of governance, mainly government efficiency, constitutes perhaps a safer advice. Indeed, successful policy package should be multifaceted, while narrower reform programs may instead prove counter productive, say the researchers.

Source: Editorial, "Black-Market Efficiency," The Atlantic, March 2009; based upon: Pierre-Guillaume Méon and Laurent Weill, "Is Corruption an Efficient Grease?" Bank of Finland/Institut d'Etudes Politiques, February 2008.

For text:
http://www.theatlantic.com/doc/200903/quickstudy
For study:
http://ifs.u-strasbg.fr/large/publications/2008/2008-06.pdf