thursday | 21 march 2013

international / finance

CYPRUS: THE SUM OF ALL FUBAR
Paul Krugman | The Conscience of a Liberal | The New York Times

Europe didn’t want an explicit bank resolution, which would among other things have given clear seniority to small insured deposits; instead, it wanted this essentially fictitious tax scheme. Meanwhile, the Cypriot government still has the illusion that its banking model can survive, and wanted to limit the hit to the big overseas depositors. Hence the debacle of the small-deposit tax.

In the end this probably comes, in some version, to what it should have been from the start — a big haircut on deposits over 100,000.

But even then the situation is by no means under control. There’s still a real estate bubble to implode, there’s still a huge problem of competitiveness (made worse because one major export industry, banking, has just gone to meet its maker), and the bailout will leave Cyprus with Greek-level sovereign debt.

So then what? As a number of people have pointed out, Cyprus is arguably better positioned than Iceland to do an Iceland, because devaluing a reintroduced Cypriot currency could bring in a lot of tourism. But will the Cypriots — who haven’t even reconciled themselves to the end of their round-tripping business — be willing to go there?

politics

HOW VIABLE IS RAND PAUL FOR 2016
Nate Silver | FiveThirtyEight | The New York Times

[Editors note: This is more interesting as a primer on the landscape of the GOP primary voters and the blocks that need to be drawn into coalition to win the nomination than as a consideration of Paul as a candidate.]

Republicans might not have as much diversity along racial or demographic lines as Democrats do, but there are several ideological constituencies within the party that could make it hard for any candidate to win the nomination by consensus.

The way that I’ve come to think of these Republican voting groups is illustrated in the diagram below, which resembles a series of interlocking “Olympic” rings. The idea is that there are five major constituencies within the party, which overlap to varying degrees.

international / policy

AUSTRALIAN TRAVEL NOTES FROM A POLICY WONK
Alex Tabarrok | Marginal Revolution

Australia has a private pension system. In the 1990s a Labor government, with the support of the trade unions, created a system of private pension accounts to supplement the basic, means-tested state pensions that Australia has had since 1909. Employers are required to pay 9% of an employee’s wages (scheduled to increase to 12%) into the private accounts. The funds can be withdrawn at retirement (age 60 for new workers), at age 65, or in exceptional cases with disability. Workers can invest their funds with very few restrictions–workers, for example, can choose among a variety of mutual funds (such as Vanguard etc.) or invest with non-profit funds run by trade union associations or they can even self-manage. The accounts, now totaling more than 1.4 trillion, have increased savings and made Australia a shareholder society. Some issues remain including fees which are probably too high (better default rules could help) and a lack of annuitization (annuitization of some portion of the lump sum payment should be required to avoid moral hazard)–see here for one critique–but overall the system appears very favorable relative to the American system.

Australia farmers pay for water at market prices. Water rights are traded and government water suppliers have either been privatized or put on a more stand-alone basis so that subsidies are minimized or at least made transparent.
—–
The world owes Sydney barristas (New Zealand also) an enormous debt for the flat white, perhaps the best form of coffee yet perfected.

history / race / housing

THE GHETTO IS PUBLIC POLICY
Ta-Nehisi Coates | The Atlantic

the most affecting aspect of the book is the demonstration of the ghetto not as a product of a violent music, super-predators, or declining respect for marriage, but of policy and power. In Chicago, the ghetto was intentional. Black people were pariahs whom no one wanted to live around. The FHA turned that prejudice into full-blown racism by refusing to insure loans taken out by people who live near blacks.

Contract-sellers reacted to this policy and “sold” homes to black people desperate for housing at four to five times its value. I say “sold” because the contract-seller kept the deed, while the “buyer” remained responsible for any repairs to the home. If the “buyer” missed one payment they could be evicted, and all of their equity would be kept by the contract-seller. This is not merely a matter of “Of.” Contract-sellers turned eviction into a racket and would structure contracts so that sudden expenses guaranteed eviction. Then the seller would fish for another black family desperate for housing, rinse and repeat. In Chicago during the early 60s, some 85 percent of African-Americans who purchased home did it on contract.

These were not broken families in need of a lecture on work ethic. These were black people playing by the rules. And for their troubles they were effectively declared outside the law and thus preyed upon.

literature

THE INSCRUTABLE BRILLIANCE OF ANNE CARSON
Sam Anderson | The New York Times Magazine

Carson is usually referred to as a poet, but just about no one finds that label satisfying: her fans (for whom she does something more than poetry), her critics (for whom she does something less than poetry) or herself. She often labels her work in conspicuously nonpoetic terms. Her book “The Beauty of the Husband” is subtitled “A Fictional Essay in 29 Tangos.” Her book “Decreation” is subtitled “Poetry, Essays, Opera.” Carson gives the impression — on the page, at readings — of someone from another world, either extraterrestrial or ancient, for whom our modern earthly categories are too artificial and simplistic to contain anything like the real truth she is determined to communicate.
—–
As with her published writing, some of her e-mails were so strange and interesting that reading them made me shake my head in excitement and confusion and wonder.

Here, just to give the flavor, are some excerpts from the e-mails of Anne Carson.

On writing: “we’re talking about the struggle to drag a thought over from the mush of the unconscious into some kind of grammar, syntax, human sense; every attempt means starting over with language. starting over with accuracy. i mean, every thought starts over, so every expression of a thought has to do the same. every accuracy has to be invented. . . . i feel i am blundering in concepts too fine for me.”

On ice bats: “I made up ice bats, there is no such thing.”

On teaching: “when i began to be published, people got the idea that i should ‘teach writing,’ which i have no idea how to do and don’t really believe in. so now and then i find myself engaged by a ‘writing program’ (as at nyu, stanford) and have to bend my wits to deflect the official purpose.”

On contradiction: “i realize all this sounds both chaotic and dishonest and probably that is the case. contradiction is the test of reality, as Simone Weil says.”

art

SWEET STENCILS: AMANDA MARIE
The Wooster Collective

American painter and stencilist, Amanda Marie, was in town last week for SCOPE. She left her mark in New York with this wall piece. We love the delicate, whimsical and innocent nature of her work against rough city walls. Check out more work by Amanda Marie on her website.

amandamarie1

science

THE GLOBAL KRAKEN
Ed Yong | Phenomenon | National Geographic

The giant [squid] was first described by the Danish naturalist Japetus Steenstrup in 1857, who named it Architeuthis dux. As Craig McClain writes, the name “translates to ‘most important squid leader’. That is scientifically an awesome name.” Since then, biologists have slapped the Architeuthis brand on no fewer than 21 potential species. Some of these over-eager taxonomists were just going on fragments of flesh, like beaks or arms that sperm whales had coughed up. Others reasoned that squid remains in far-off corners of the world must belong to different species. After all, giant squids are everywhere—they’ve turned up in all oceans except the waters around Antarctica.

How many of these species are valid?
—–
Now, a team of scientists from eight countries, led by Inger Winkelmann from the University of Copenhagen, has tried to settle the debate by looking at the kraken’s genes. Together, they amassed tissue samples from 43 giant squids caught all over the animal’s range, from Florida to South Africa to New Zealand. They sequenced each samples to piece together its mitochondrial genome—a small secondary set of DNA, which sits outside the main genome in tiny bean-shaped batteries.

The team found that the giant squid’s genetic diversity is incredibly low. Even though the individuals hailed from opposite corners of the world, they differed at less than 1 in every 100 DNA letters. For comparison, that’s 44 times less diverse than the Humboldt squid, which only lives in the eastern Pacific. In fact, the giant squid seems to be genetically narrower than any other sea-going species that scientists have tested, with the sole exception of the basking shark.

This strongly suggests that the 21 proposed species of giant squid can indeed be collapsed into one. There’s just the one global kraken—Architeuthis dux, the one-and-only original.


DE-EXTINCTION

Brian Switeck | Phenomenon | National Geographic

The first groaner of the TEDxDeExtinction conference cropped up less than an hour into the program. Paleontologist Michael Archer was on stage, wrapping up his talk on possibly recreating the gastric brooding frog and the thylacine – two species totally lost from Australia in recent time. Archer laid out the technological particulars of the plans, as well as where the animals might live, but at the end he took a turn for the transcendentalist in justifying the difficult endeavor to resurrect these creatures. Since our species played a prominent role in wiping out both species, Archer argued, we have an obligation to “restore the balance of nature that we have upset.” If I had brought a flask with me, I might have taken a strengthening sip of whiskey right then.

There is no such thing as “the balance of nature.” If sifting through the fossil record has taught me anything, it’s that change is the rule. Balance is only a temporary illusion created by the difficulties of envisioning life on a geological scale. That, and quite a few conversations with practically-minded ecologists and biologists, means that I’ve become a bit allergic to snuggly phrases that are often trotted out to emphasize the inherent goodness of nature – whatever “nature” means – in a way that suggests we can simply restore the complexity of life to a stable state that the ghosts of Thoreau, Emerson, and Muir would honor us for. And the irritation of that line kept with me throughout the rest of the day. Perhaps the closing appeal to the balance of nature was a trifling throwaway, yet that one line underscored the problematic nature of the major proposal the assembled speakers and guests had been called to consider – that we can, and should, resurrect lost life to take some of the tarnish off our ecological souls. The concept falls under the banner of “de-extinction.”

music

JAKE BUGG: JAKE BUGG
Barry Nicholson | NME

Bugg’s love of ’60s psych-folk fella Donovan aside, his cues may not come from anywhere unexpected, but it’s what he does with them that counts. His urchin’s eye-view is drawn to the unglamorous and insalubrious: ‘Seen It All’ opens in a car park with Bugg dropping a pill (“Or maybe two”) before crashing a party at a local gangster’s house where “a friend took me aside, said ‘everyone here has a knife'”. Sure as the bullet in Chekhov’s gun, the song ends with someone being shivved in the garden. Another tune, ‘The Ballad of Mr Jones’, finds our young voyeur watching from the periphery as a wronged man exacts revenge on the people who killed his wife. Nottingham’s tourist board must be thrilled.

But his scowling anger is just a front, a carefully erected facade that shields a vulnerable and contemplative soul.

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