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August 7, 2012

Latest Posts from Economist's View

Latest Posts from Economist's View

Posted: 04 Jul 2012 02:34 AM PDT
Should we be impressed with Romney's business credentials? Nope:
Off And Out With Mitt Romney, by Paul Krugman: It appears that the Obama campaign has decided to ignore the queasiness of Democrats with Wall Street ties, and go after Mitt Romney's record at Bain. And rightly so!
After all, what is Romney's case – that is, why does he want us to think he should be president? It's not about ideology: Romney offers nothing but warmed-over right-wing platitudes, with an extra helping of fraudulent arithmetic, and it's fairly obvious that even he himself doesn't believe anything he's saying.
Instead, his thing is competence: supposedly, his record as a successful businessman should tell us that he knows how to create jobs. And this in turn means that we have every right to ask exactly what kind of a businessman he was. ...
Romney ... didn't build businesses, he bought and sold them – sometimes restructuring them in ways that added jobs, often in ways that preserved profits but destroyed jobs, and fairly often in ways that extracted money for Bain but killed the business in the process.
And recently the Washington Post added a further piece of information: Bain invested in companies that specialized in helping other companies get rid of employees ... by outsourcing ... and offshoring...
The Romney camp went ballistic, accusing the Post of confusing outsourcing and offshoring, but this is a pretty pathetic defense. For one thing, there weren't any actual errors in the article. For another, it's simply not true, as the Romney people would have you believe, that domestic outsourcing is entirely innocuous. On the contrary, it's often a way to replace well-paid employees who receive decent health and retirement benefits with low-wage, low-benefit employees at subcontracting firms. That is, it's still about redistribution from middle-class Americans to a small minority at the top.
Arguably, that's just business – but it's not the kind of business that makes you especially want to see Romney as president.
Or put it a different way: Romney wasn't so much a captain of industry as a captain of deindustrialization, making big profits for his firm (and himself) by helping to dismantle the implicit social contract that used to make America a middle-class society.
So now he proposes bringing the skills and techniques he used in business to the White House. Somehow, I'm not enthusiastic about the prospect.
Posted: 04 Jul 2012 02:07 AM PDT
It's Higgs boson day today here at the conference. There's a live feed to the press conference from CERN, the schedule has been rearranged to accommodate it, etc. I can't say I'm as excited about it as some of the people here -- they are quite abuzz -- but it is kind of cool. [Update: In the press conference, they are very clear to say they have found something -- a boson of some sort -- but they emphasize they can't yet say it's Higgs. But it seems clear they think that's exactly what they've found. Update: I'm sitting next to two Nobel prize winners, George Smoot and Kurt W├╝thrich -- not sure how that happened, Smoot sat next to me yesterday too, but anyway -- the latter is upset at the press conference. He thinks it is too soon to make the announcement, and a simple press release saying we found something, but not sure what it is would have better conveyed what they actually know at this point. In short, though it may turn out to be correct, he thinkis it is being oversold at this point (in part to satisfy the money interests behind the discovery.]:
A new particle has been discovered -- chances are, it is the Higgs boson, EurekAlert: The long and complicated journey to detect the Higgs boson, which started with one small step about 25 years ago, might finally have reached its goal. This was reported by LHC particle accelerator scientists today at the European Laboratory for Particle Physics, CERN, near Geneva.
The Higgs boson is the final building block that has been missing from the "Standard Model," which describes the structure of matter in the universe. The Higgs boson combines two forces of nature and shows that they are, in fact, different aspects of a more fundamental force. The particle is also responsible for the existence of mass in the elementary particles. ...
Most of us experience the world as a diverse and complex place. But the physicists among us are not content with visible reality. They are striving to get to the bottom of that reality and to see whether it is, as they think, based on the absolute simplicity displayed by the early universe. They expect to observe a range of particles that are different "ensembles" of a handful of elementary particles. The scientists are hoping to see a unification of the four fundamental forces of nature that act on these particles (the weak force responsible for radioactivity, electromagnetic force, the strong force responsible for the existence of protons and neutrons, and gravitation).
The first step in the journey to unify the forces was completed with the almost certain discovery of the Higgs particle: The union of two elementary forces – the electromagnetic and weak force, to become the electroweak force.
One aspect of the Higgs boson, named after the Scottish physicist Peter Higgs, manifests itself in the giving of mass to the weak force carriers – the "W" and "Z" particles. (The electromagnetic force carrier, the photon, remains massless.) ...
The likelihood of creating the Higgs boson in a single collision is similar to that of randomly extracting a specific living cell from the leaf of a plant, out of all the plants growing on Earth. To cope with this task,... scientists ... developed unique particle detectors... These detectors have been adapted to detect muon particles. In some of the very rare collisions that produce Higgs particles, the footprint of the Higgs particle – that which is recorded in the detectors – is four energetic muons. Thus, the detection of such muons provides circumstantial evidence for the existence of the Higgs particle. ...
The calculations carried out by scientists in recent weeks ... have revealed, with a high degree of statistical significance, a new particle with a mass similar to the expected mass of the Higgs. The wording is purposely cautious, leaving room for the possibility that a new particle other than the Higgs can be found within this mass range. The probability that this is, indeed, a new particle, is quite low. (But if it were, in truth, a different particle, say some physicists, things will start to get "really interesting.") ...
More here:
... The Higgs boson is the final piece of the Standard Model of particle physics, an amazing theoretical edifice that has stood the test of time for more than three decades now. The Standard Model features two kinds of particles. There are "fermions," the particles of matter, which take up space (you can't pile them on top of each other). Then there are "bosons," the force particles, which can pile up. The four forces include gravity, electromagnetism, the strong nuclear force, and the weak nuclear force. That last one-- the weak force--is the most messy and complicated of the forces. And the Higgs boson (or really the Higgs field from which it arises) is the reason why.
For the other forces (gravity, electromagnetism, strong), the force carrying particles all have precisely zero mass. That's not an accident; according to modern physics, the very existence of these forces reflects a deep symmetry of Nature's laws, and this symmetry demands that the force-carrying particles remain massless. For the weak force, the force-carrying particles are called the W and Z bosons, and they have quite substantial masses. The reason why (we believe) is that the underlying symmetry has been broken by the Higgs field.
The Higgs field breaks this hidden symmetry because it fills space--it has a nonzero value absolutely everywhere. You move through it as you go through your day, and you would still be moving through it if you were flying through interstellar space. It's invisible and hard to interact with, but it's there. And it doesn't only give mass to the W and Z bosons; it's also responsible for giving mass to all of the fermions that make up matter. Electrons, muons, quarks--all these particles get mass because of the Higgs. It's kind of a big deal. ...
Posted: 04 Jul 2012 12:06 AM PDT
Posted: 03 Jul 2012 03:06 PM PDT
The Higgs boson has dominated the talk at the conference here in Germany, but -- at least among the people I've talked to -- the future of the euro is a close second:
Austerity is undermining Europe's grand vision, by Amartya Sen, Commentary, CIF: The dream of the unification of Europe goes back at least to the 15th century, but it is the nastiness of the world wars in the 20th century that established its urgent need in our time. The challenge was well described by WH Auden in early 1939: In the nightmare of the dark / All the dogs of Europe bark, / And the living nations wait, / Each sequestered in its hate.
It is important to appreciate that the movement for European unification began as a crusade for cross-border amity and political unity, combined with freer movement of people and goods. Giving priority to financial unification, with a common currency, came much later, and it has, to some extent, started to derail the original aspiration of European unity.
The so-called "rescue" packages for the troubled economies of Europe have involved insistence on draconian cuts in public services and living standards. The hardship and inequality of the process have frayed tempers in austerity-hit countries and generated resistance – and partial non-compliance – which in turn have irritated the leaders of countries offering the "rescue". The very thing that the pioneers of European unity wanted to eliminate, namely disaffection among European nations, has been fomented by these deeply divisive policies (now reflected in such rhetoric as "lazy Greeks" or "domineering Germans," depending on where you live). ...
There is no danger of a return to 1939, but it does not help Europe to have dogs barking, sequestered in resentment and contempt – if not hate. On the economic side, too, the policies have been seriously counterproductive, with falling incomes, high unemployment and disappearing services, without the expected curative effect of deficit reduction. ...
If European economic policies have been economically unsound, socially disruptive and normatively contrary to the commitments that emerged in Europe after the second world war, they have been politically naive as well. The policies have been chosen by financial leaders with little attempt to have serious public discussion on the subject.
Decision-making without public discussion – standard practice in the making of European financial policies – is not only undemocratic, but also inefficient in terms of generating reasoned practical solutions. For example, serious consideration of the kinds of institutional reforms badly needed in Europe – not just in Greece – has, in fact, been hampered, rather than aided, by the loss of clarity on the distinction between reform of bad administrative arrangements on the one hand (such as people evading taxes, government servants using favoritism, or unviably low retiring ages being preserved), and on the other, austerity in the form of ruthless cuts in public services and basic social security. The requirements for alleged financial discipline have tended to amalgamate the two in a compound package, even though any analysis of social justice would assess policies for necessary reform in an altogether different way from ruthless cuts in important public services.
The problems we are seeing in Europe today are mainly the result of policy mistakes: punishments for bad sequencing (currency unity first, political unity later); for bad economic reasoning (including ignoring Keynesian economic lessons as well as neglecting the importance of public services to European people); for authoritarian decision-making; and for persistent intellectual confusion between reform and austerity. Nothing in Europe is as important today as a clear-headed recognition of what has gone so badly wrong in implementing the grand vision of a united Europe.
Posted: 03 Jul 2012 09:09 AM PDT
Laura Tyson:
Obama versus Romney on Jobs, by Laura Tyson, Commentary, Project Syndicate: The United States has just completed its third year of economic recovery, but the unemployment rate remains above 8%, and there are worrisome signs of a slowdown. So it is no surprise that jobs have become a major focus in the presidential campaign – or that the candidates have very different ideas about how to boost employment.
Last autumn, President Barack Obama proposed the American Jobs Act, a $450 billion package of fiscal measures aimed at job creation. The AJA amounted to about 3% of GDP and was designed to take effect in 2012... Most of its measures had enjoyed bipartisan support in the past; tax cuts comprised about 56% of the total cost; and the package was paid for in Obama's long-term deficit reduction plan.
Several independent economists concluded that Obama's plan would provide a significant lift to the job market in 2012-2013...
The AJA was filibustered by Senate Republicans, and the Republican-controlled House of Representatives likewise prevented the bill from coming to a vote. ...
Altogether, Congress left at least one million jobs on the negotiating table, holding unemployed workers hostage to the outcome of November's election.
Meanwhile, in response to persistent media pressure, Romney has unveiled his policies to boost short-term job creation. ...Obama's proposals to boost job creation are convincing, whereas Romney's proposals would have little or no effect – and some could even make matters worse. Voters need to know the difference. 
There are more details on the two proposals in the article.
[Also, I probably should have done more to highlight her Economix piece on the European crisis. It appeared on Friday afternoon and was one of the first pieces that talked about the recent Summit, along with a roadmap of what else needs to be done to solve the European crisis.]

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