Heretics' almanac

Recession, adjustment, or what?

In a macroeconomic sense, recessions aren't bad things; they're adjustments. In a broad sense, they result when inventories have built up to the point that production has to decrease until the inventories come down to a reasonable level. The problem is that when production declines, then demand declines, and then it takes longer to reduce the inventories. When there are rising prices on, say, corn, farmers readjust their capacity to grow more corn. Over time, the supply and demand balance shift, but people who have grown corn with certain price expectations are reluctant to take losses. Especially when the incremental capacity comes at higher average fixed cost. Prices will eventually go down, but some of the capacity will have to be shut down and investments written off. Social costs follow, with dislocated farmers and farm workers.

In this particular case, a bunch of people assumed that residential real estate prices would continue to rise and markets remain liquid, thereby assuring value of the collateral of loans made to people who might otherwise default. Investors underestimated the risk of the assets and priced them incorrectly.

A note on Annapolis

The multilateral talks scheduled to start in Annapolis tomorrow aren't getting a lot of optimistic press. The hostess, Condi Rice, has ratcheted down expectations quite a bit, and neither side is holding out much hope for a serious breakthrough. Setting aside the fact that most breakthroughs tend to occur when they're not expected, it's worth wondering why everyone is so downbeat ahead of this summit.

Hagen's undisputable mandate

Carl I Hagen, the charismatic and demonstrably effective leader of the Norwegian Progress Party, has published his memoirs, "Speaking Honestly,' and by Aftenposten's account, it's a series of denigrating characteristics of fellow politicians.

Knowing Hagen, the characteristics are probably both sincere and accurate. The question is whether they do anything to elevate the political discourse in Norway. We'll see.

The main point seems to be that the Progress Party in general and Hagen in particular are treated as a fringe party, even if they currently rate as the second largest party in Norway. And here Hagen has a point. Whether or not he takes himself too seriously, a party that attracts this many votes clearly has a political mandate it would be contemptible to dismiss. Agree or disagree with the platform and positions, enough Norwegians stand behind it that it would be undemocratic to poo-poo it. And Hagen makes the point rather well by saying that the secret to his success is simply in taking seriously the attitudes of the Norwegian electorate, or at least a big segment of it.

Malicious shit in Norway

Karita Bekkemellem, who apparently was asked to resign her position as "equal rights and children's minister" in the Stoltenberg cabinet, has followed Valla's lead by airing her grievances about the Norwegian Labor party. She says much of what has been written about her was "malicious shit."

I'm ambivalent about this: I don't doubt what she's saying, and I've been concerned about the Norwegian Labor Party's domination in Norwegian politics since Gerhardsen more or less suspended the constitution after WWII. And the internal discipline has clearly done very little to foster a meriticracy in Norwegian politics.

On the other hand, the newspapers are making this all about personalities, and especially Stoltenberg. This is kind of tedious now.

But I guess it would be too much to expect from Norwegian journalists that they deal with systemic issues. Much more interesting to talk with Joar Hoel Larsen about why he refers to people from the US as USans rather than Americans.

Facebook and Palestine

Facebook first offered "Palestine" as a network, the removed it (offering the West Bank and Gaza instead), the put it back. Issue: whether "Palestine" is a country.

It's not a sovereign state. There is no border, no unified government, no basis in international law to equate "Palestine" - as a political entity - to Sweden, Switzerland, or Peru.

Facebook would do well to loosen up the criteria for what constitutes a network to avoid this controversy. Without a doubt, "Palestine" is a national identity for a large number of people, and it would of course be offensive to dismiss this.

But one of the critics of Facebook's removal of Palestine said that this amounted to denying the Palestinian claim to Jerusalem. That's rather strengthening the argument for removing "Palestine."

What we can learn from the Valla debacle

It got more headlines than poor Dumbledore's "outing," at least in Norway: Gerd-Liv Valla's new book, called Prosessen ("the Process"), about the events that led to her resignation as head of the Norwegian confederation of labor unions, LO. (A side scandal has also come up that she wrote much of this book while she was on sick leave, since Norwegians aren't allowed to work while on sick leave. But she only spoke into a tape recorder; there was a ghost writer. So now there's soon going to be a debate as two what constitutes "work" for sick leave purposes).

Valla is unkind to most of her former colleagues and fellow party members, from what I can tell. Norway's prime minister comes across as a bit of a wimp, etc. It's hard to keep up with these personalities, especially since this issue has close to zero relevance for anyone except the principals.

Low Annapolis expectations

In an early entry, I submitted my skepticism about 1) Rice's trip, 2) the prospects for any kind of negotiating breakthrough, and 3) the long-term consequences of a treaty in which Israel makes serious concessions to a long-standing enemy that is at best unstable and at worst untrustworthy. I think my skepticism is well-founded, but I also hope I'm wrong.

But I'm wrong on the two first counts and right on the third, I'm effectively right on all of them. And therein lies the rub.

This is the scenario that worries me: the Quartet get the parties together, put pressure on both sides, an agreement is reached that makes both sides unhappy, but they go along with it, knowing that whomever is intransigent will get on the Quartet's shit list. Israel evicts its citizens from towns outside the 1949 armistice lines, Abbas has to impose his will on the Palestinians', teetering on the brink of a civil war. Borders are established, success is declared, someobody gets nominated for a Nobel peace prize. Self-proclaimed experts in armchairs applaud. Most everyone outside the area let's out a sigh of relief.

Then rockets start flying over the border into Israel, targeting Jerusalem suburbs, Netanya, Galilean kibbutzim. There is unrest among many Palestinians, who feel sold out. An election in Arab Palestine once again gives Hamas and other radical factions power. Terrorism gradually gives way to belligerency, under the pretext of provocation.

In Israel, hundreds of thousands of displaced former residents of the territories find an increasingly unified political voice, asking what good their sacrifice did. There's less talk of being good neighbors with the Palestinians and more about containing them. Borders are sealed, protests are filed, a new military doctrine is created to prevent Palestinian attacks on Israel. Egypt and Jordan feel the pressure, Palestinian groups orient themselves more toward Hizballah, and Palestinians start emigrating, just as Israeli Arabs find themselves torn between conflicting loyalties. International diplomacy is lost in the reality that two sovereign states with unambiguous borders are in a constant, low level conflict. Everybody is worse off, and an independent Palestinian state is no longer an ambitious goal, but a historical failure.

Both Abbas and Israel know this scenario (and it's not the worst conceivable) one well enough to make unreasonable demands from each other. Abbas knows, deep down inside, that Israel can not be defeated, that any kind of war will at best improve the Palestinian bargaining position only marginally, and that any scenario that puts real accountability on his people's shoulders is deadly. It is one thing to fight a heroic liberation struggle (even if it is neither heroic nor aimed at liberation, but what else is new?), it's another to start building a state and making peace with longstanding enemies.

I think that Rice, Blair, and the Quartet are naïve about the way these things play out, oblivious to the real historical lessons, altogether too hopeful about what Abbas will or can accomplish. Israel isn't an easy party, either; but what Israelis want is much closer to what the world wants.

SPOV and politics

I suspect there's a rich irony in the way "scientific method" is thrown around in the political debate these days. The left is denouncing intelligent design as nothing but fundamentalist wishful thinking, while the right is lambasting global warming as bad science. As if both issues are fully resolved one way or another.

What has struck me more than once - and especially in Wikipedia - is that those who advocate a scientific point of view actually have a very superficial understanding of what science is and does.

These examples are illustrative. The "theory" of evolution is an attempt to explain facts that can be observed in the real world. It has not yet been disproven, and all available evidence supports it. As a result, it remains the best explanation for certain natural phenomena. This isn't to say it's the final explanation, nor the only one. But if you're going to postulate another explanation, it must either do better than evolution as a whole or add to it by explaining something evolution doesn't.

Intelligent design fails on both these counts and does therefore not deserve anything approaching equal footing.

But this doesn't mean that the questions are unreasonable or unscientific. It is perfectly fair to ask whether we can observe things that can't be explained with evolution and can be better explained by intelligent design. But note that those are two questions. Merely finding weaknesses in the theory of evolution does not strengthen the case for intelligent design. It simply means that evolution as a model is incomplete, a premise few evolutionary scientists would dispute. It is much tougher to find support for the second part, namely that intelligent design is the superior explanation for certain things. Irreducable complexity is an intelligent point, but it still seems kind of futile, because everything related to life seems hopelessly complex until people have taken a closer look at it. I think the intelligent design folks are asking useful questions, but I'm inclined to believe they'll do rather more to prove than to disprove the evolutionary model before they're done.

Global warming runs into a "show me" argument. The scientific consensus - and it really is a consensus - has expressed two convictions: one is that the temperature on Earth's surface is increasing, and the other is that human activity is a major contributor to that increase. There are two important corollaries: one is that climate change has unpredictable consequences; the other is that human activity must change to mitigate this uncertainty.

The two assertions are based on a preponderance of the evidence. Data convinces the scientists that climate changes are a result of trends not random fluctuations or natural cycles. Statistical models are helpful here: if you know probabilities of certain events, you can test to see how likely it is that a certain series of events can be explained by one thing or another. In other words, it is much harder to write off 20 successively warmer winters as a fluke than three successively warmer winters. To simplify things a bit.

But there is quite a bit of uncertainty, actually a lot. We can't quanitfy the effects of different kinds of human activity on the climate, and we certainly don't know the effects it may have in the long run, or how much we can actually change things.

But there's again the fact that global warming remains the best model, the best explanation for what we're seeing, and that new data supports it more. In that sense, it's like evolution. It may not be perfect, it may not explain everything, but it explains more than anything else.

No to a Palestinian state (for now)

I really wish the Palestinians well. I think they are entitled to everything all humans are entitled to: political freedom and self-determination, free speech and cultural expression, and of course badly needed humanitarian relief. Not only do they deserve it; they are likely to embrace it and flourish in it.

But I think Rice is way off when she says it's time for a Palestinian state, for these reasons:

• Abbas's demands for establishing such a state are unreasonable. The issues he's outlined are legitimate, but his proposed resolutions aren't.
• This is because Abbas has no choice - he will be unseated or worse if he proposes anything that is acceptable to Israel. This is how radicalized Palestinian public opinion has become, for the simple reason that the linking of terrorism and demands has been so strong for so long.
• It is unclear - to put it kindly - what options Israel will have for defending itself against the (virtually guaranteed) hostile acts of this state. The Europeans - as is their longstanding tradition - would rather that Israel did nothing to defend itself.
• The likely result of a Palestinian state right now is a situation ten times worse than what we're seeing Gaza, with disastrous results for the Palestinians and Israelis, and the outlook for long-term peace.
• Rice should give the Palestinians a choice: they can have a timetable, or a road map, but not both. That way they can have as much of a state as they can pull together by the deadline; or they can have a solid state eventually based on certain milestones. What they can't have is everything they want from Israel while reserving the right to demand more under the threat of violence.
• In the meantime, the international community should support everything Abbas does to institute democratic institutions, low-level contact between the parties, confidence-building measures, etc. While also lending absolute support for Israel's right to defend itself against terrorists, even if that includes barriers, checkpoints, or wading into the West Bank and Gaza to arrest the crooks.

It's time the world treated the Palestinians as the adults they are

The futility of Rice's trip

Add to the list of Bush's foreign policy failings a lack of progress in the Arab-Israeli "peace process," but the scare quotes might give away my suspicion that more blame lies elsewhere.

Having said that, it's hard to see what Rice is trying to accomplish these days. She started before even arriving by admonishing the Israelis not to do aything that might jeopardize future talks. The Palestinians think it's all a waste of time unless the US imposes a blueprint for a final settlement on Israel, which is to say a "return" to pre-1967 "borders," and some "right of return" for Palestinians.

You would never believe Israel has won every single war she's been forced to fight; that by any military standard, combined Arab armies, Hizaballah, Fatah, and Hamas have been humiliated again and again, etc. Israel is asked to make political concessions, compromise its citizens' security, and make mea culpas for every real and imagined transgression. While the Arab states and corrupt and cruel Palestinian leadership can freely make demands as a condition for not inflicting more suffering on their own people.

It's time, it's way past time, that Western political leaders said it like it was: Israel is far from perfect, but whatever errors and misdeeds committed by are a) sadly typical of any country, even the best of them, under pressure, and b) they pale into nothing when compared to what Arab regimes do to their own people and their enemies.

Fatah, Hamas, and Hizballah are terrorist organizations. Unless and until they renounce and abandon their terrorist ways, there is no point in negotiating with them. Rice should canvel her trip, Blair should come home, and that's what they should tell the world.