GlobLog - August 2007
A direct link to each entry is obtained by using the button below the entry.

15:02 - I POD: 

In Timbro´s series of podcasts, I have now produced one. For almost an hour I talk (in Swedish) about happiness, what it is, how we can attain it and how some politicians try to steal it. I also talk about the moment when I discovered that I was happy, and play the music that increase my wellbeing.

You can listan to it or download it here.

00:02 - HOW MANY COMMISSIONERS DOES IT TAKE TO CHANGE A LIGHTBULB?: 

Did you think that was an absurd example of protectionism? Wait til you hear this:

The European Commission, which talks about how important it is that we switch to energy-saving bulbs, has just decided to continue to make them too expensive for European consumers by extending the 66 percent tariff against energy-saving bulbs from China another year. In the end, monopoly profits for Osram was more important for the Commission than the planet, the consumers and free trade.

23:38 - SAVING THE FAMILY FARM: 

So what is this? A guide to all the Starbucks cafés in Manhattan?

No, nothing that nice. It´s a subsidy map from the Corner. The red dots are people who live in Manhattan but receive agricultural subsidies. So apparently they can afford it and apparently their work doesn´t force them to stay too close to the farm. The big red dots are people who get more than a quarter of a million dollars in federal subsidies annually.

The House Democrats just stopped the Bush Administration´s plan to reduce the income threshold to $200,000 a year. I guess their argument is that it would hurt hard working sommeliers at fancy Manhattan restaurants.

(Thanks Tino)

14:02 - MISSA INTE: 

Mattias Svensson om Göran Rosenberg, intelligent design, ointelligenta artiklar och världens roligaste halv-syftningsfel.

02:19 - ANOTHER COFFEE, MR PUTNAM?: 

Speaking of statistics, if you want to explain the difference between correlation and causation to someone, here is a fascinating example from NationMaster:

The five countries with the highest coffee consumption are Norway, Finland, Denmark, Sweden and the Netherlands. And all that coffee must make us trust our fellow man, because the countries with the highest levels of trust are ... yes, Norway, Finland, Denmark, Sweden and the Netherlands...

11:32 - IGNORANCE AND VEILS OF IGNORANCE: 

At least one angry blogger "depises" me for using the statistics ("lies") in the last post. He (and some friendly people who emailed me) point out that one of the poverty measurses actually results in an increase in the absolute number of poor in India. They are right. According to the World Bank (pdf), extreme poverty in India was reduced from 51.75 to 34.33 percent 1981-2004. But since the population grew rapidly, the number increased by 7 million people.

Does that mean that poverty actually increased in India, as the angry blogger would have it? No. If we were to say yes, we would have to accept that a country with a 1.1 percent poverty rate and 100 million inhabitants has more poverty than a country with a 100 percent poverty rate and 1 million inhabitants, and that a country with 1.1 percent unemployment and 100 million inhabitants has more unemployment than a country with 100 percent unemployment and 1 million inhabitants. If a country reduced unemployment from 10 to 5 percent, you would say that unemployment grew if the population size more than doubled at the same time. (And obviously, you would say that Bangladesh is richer than Sweden, because you would not measure wealth per capita, but only the total number).

Of course in a literal sense the first country has more people who are unemployed, but no one would say that this country has higher unemployment. But some people do this when they talk of poverty, because they want to deny the progress that is made worldwide.

I think Björn Lomborg was right when he used John Rawls´ "veil of ignorance" to think of development. Imagine that you must choose which society you were to live in, without knowing anything about your position in that society. Then it is obvious that you would prefer the country with the lowest rate of unemployment or poverty and the highest GDP per capita, because that is what says something about what the average life is like in that society, and not just about the size of the population in that society.

The poverty rate is a measure of poverty, the poverty number is a measure of population size. I am also sad that India has not made even bigger progress (it´s not big enough, it´s just the biggest ever) but those who lament the fact that the number of poor grew by 7 million 1981-2004 do not lament the fact that Indian poverty grew, but the fact that the Indian population grew.

00:02 - THEY MAKE IT UP AS THEY GO ALONG: 

I missed it, but Olle emails me about how Kulturnytt in Swedish public service radio celebrated India´s 60th anniversary. They did it by saying that "poverty has hardly been reduced" as India has been modernised and globalised.

That´s how you ruin someone´s birthday out of a lack of statistics. if we use the offical Indian poverty rate as measured by the Indian Planning Commission poverty has been reduced from 51.3 to 27.5 percent between 1977/78 and 2004/05.

If we prefer the World Bank´s strict definition of extreme poverty (I do), it has been reduced from almost 60 to 40 percent in rural areas and from almost 30 to 20 percent in urban areas, between 1981 and 2004.

14:01 - TOY SOLDIERS: 

Do you want to get a sense of the current American debate about trade? All you need is KAL´s cartoon in The Economist this week:

Bush: "I understand Russia is making plans to expand its military airpower..."

Adviser 1: "Yes, Mr President. We are preparing for a worst case scenario."

Adviser 2: "Russian bombers dropping Chinese toys."

10:03 - ORGANISERA INTE IHJÄL OSS, SNÄLLA: 

"Hej kamrater, några rader om varför vi inte vill skriva på ert kollektivavtal.

 Vi tror att vi är bäst på att sköta vårt företag, under 45 år har det drivits utan kollektivavtal. Vi har löst våra konflikter utan större problem. Under den tiden har fackföreningsrörelse och arbetsgivareorganisationer många gånger misslyckats med sin uppgift. Det har kostat enskilda och samhället massor med pengar."

- En anonym företagare vädjar till facket att använda argument i stället för tvångsåtgärder. Läs hela på Fredrick Federleys blogg.

21:38 - MY KIND OF CENSOR: 

I admire people who follow their principles to their logical conclusion. Naoki Nishi, for example. A Japanese businessman who worked at a Mazda Motor Subcontractor and was appointed head of restructuring. He fired himself to cut costs.

Or the German post minister, Wolfgang Bötsch, who privatised the German postbank, and then left the government, because it did not need his services any more.

Today, Gunnel Arrbäck belongs to that list, the head of the Swedish Government´s Cinema Bureau, which censors violent movies (they´ve deleted scenes in Psycho and Moonraker, for example). For years she has argued that this task is not consistent with freedom of speech, and that grown-ups should be allowed to watch whatever they like. Now she has learnt that the centre-reight government is not more interested in free speech than the social democrats, and therefore she resigned today.

As Arrbäck told SVT Rapport today:

"If adults want to spend 90 SEK to get scared it´s their problem, not the governments´."

13:11 - WE HAVE NOTHING TO FEAR BUT THE ABSENCE OF FEAR: 

No matter what kind of system and era we live in mistakes are made and people do stupid things. The important questions is how we deal with those mistakes. Do people have to bear the responsibility themselves or do we encourage them by bailing them out? Martin Wolf says what needs to be said about the recent financial turbulence in Financial Times:

"Financial markets, and particularly the big players within them, need fear. Without it, they go crazy. Moreover, it is impossible for outsiders to regulate a global financial system riddled with conflicts of interest and dominated by huge derivatives markets, massive trading by highly leveraged hedge funds and reliance on abstruse mathematics and questionable statistical models. These markets must regulate themselves. The only thing likely to persuade them to do so is the certainty that the players will be allowed to go bust. [...]

Not so Jim Cramer, hedge fund manager and television pundit, who declared last Friday that chairman of the Federal Reserve, Ben Bernanke, ´is being an academic!...My people have been in this game for 25 years. And they are losing their jobs and these firms are going to go out of business, and he’s nuts! They’re nuts! They know nothing! . . .  The Fed is asleep.´

So capitalism is for poor people and socialism is for capitalists. This view is not just offensive. It is catastrophic.

The world has witnessed four great bubbles over the past two decades – in Japanese stocks in the late 1980s, in east Asia’s stocks and property in the mid-1990s, in the US (and European) stock markets in the late 1990s and, finally, in the housing markets of much of the advanced world in the 2000s. There has been too much imprudent finance worldwide, with central bankers and ministries of finance providing rescue at virtually every stage.

Unfortunately, there is every chance of repeating mistakes."

And so does The Economist:

"The retreat to a new level of risk was never going to be orderly or free of casualties. Neither should it be. Bankers and investors need to suffer precisely because the methods of modern finance have been found wanting. It sounds Darwinian, but the brutal demonstration that you pay for your sins is what leads the system to evolve. Markets learn from their mistakes. Only fear will spur investors to price risks better and get them to put more effort into monitoring their counterparties.

If these lessons are to sink in, central bankers must stand back—as, by and large, they have done. Every intervention now will be taken as a sign of what the regulators will do next time. If they bail out banks that have mispriced risk, the mispricing will continue."

10:29 - FIRST: DO NO HARM: 

“If someone wants to help you, they shouldn’t do it by destroying the very thing that they’re trying to promote"

- George Odo explains the decision of CARE - one of the world´s biggest charities - to stop administering US food aid for African countries, since it undermines agriculture in those countries. Interviewed in NYT (via The Insider).

00:09 - BUY NOW, IT WILL NEVER BE THIS CHEAP AGAIN: 

Just when you thought that Zimbabwe´s inflation rate couldn´t climb higher, the IMF predicts that the rate could hit 100,000 percent by the end of this year. To give you a sense of what this means, here is a hyper-inflated shipping list from The Scotsman (Z$1,000 is officially $4):

• Small bag of onions: Z$200,000

• Bar of Dove soap: Z$140,000

• One kg of rice: Z$230,000

• One litre of fuel, where available: Z$300,000

• 200g local cheese: Z$230,000

• 500g washing powder: Z$750,000

• Box of Bran Flakes: Z$260,000

• White loaf with sesame seeds: Z$90,000 (standard loaves are officially Z$22,000 but are not available)

• Small pot of jam: Z$150,000

• Packet of biscuits: Z$140,000

• One litre enamel paint: Z$1.9 million

• Pack of four disposable nappies: Z$1.2 million

• Tin of tuna: Z$290,000

• Tin of baked beans: Z$65,000

• 500ml sterilised milk - where available - Z$32,500

• One egg - where available - Z$15,000

• No chicken, beef, pork, sausages, cooking oil, sugar, flour, margarine, fruit cordial, matches.

• Government Herald newspaper (Page 1 yesterday proclaimed "Zanu-PF mayors endorse President"): Z$25,000. Normally sold out by 9am

23:35 - EMAIL OF THE DAY: 

I constantly write about global progress, but sometimes it´s difficult to see the changes that are closest to yourself, just like you miss how people change if you see them every day. I just got some help from James, an Australian who has visited Sweden regularly the last nine years. He writes:

"When I first went to Sweden in 1999, the supermarkets were a relatively barren affair. Dare I say an East-European-like experience. Not Estonia, further east. The prices were also sky high. 

I have noticed in change in the past few years. The supermarkets are getting bigger and you now have a much better selection of food. There are bountiful displays of produce. Apples from far away places like New Zealand and Argentina. Oranges from Central America. Exotic fruits and nuts. Importantly, you also seem to get more groceries for your money.

Something has changed in the past decade and it has been for the better. I don´t know enough about Sweden to understand what exactly has happened, but it works."

17:40 - NU KÄNNS DET BÄTTRE: 

Mattias Svensson vet inte om det här, men när jag en gång i tiden funderade på att ha en gästbloggare här när jag är upptagen med intensivt författarskap (som nu t ex), så tänkte jag bjuda in honom till att bli det.

Nu införde jag aldrig ett gästarbetararsystem, men alla mina skuldkänslor över att beröva er en av Sveriges skarpaste och roligaste liberala skribenter är som bortblåsta nu när ni äntligen kan ta del av Mattias i bloggform här - om bl a körkortsbyårkrati, yttrandefrihet och dansen och dess fiender.

15:40 - CRY OVER SPILLED MILK: 

At last some good news for European farmers. Very strong Chinese demand has led to an increase in the price of milk and other dairy products of up to 50 percent on the German market. Doesn´t that sound like the perfect moment for European dairy farmers to increase production dramatically and make tons of money?

Yes, except for one thing: The EU milk quotas from 1984 that prevents them from producing more than they do. The CAP give European farmers a helping hand, but it also binds their hands.