Archive | March 2013

“Monsanto Protection Act”: Liberal Outrage or Herd Behavior?

Liberals gone wild

Liberals gone wild

I’ve been seeing a number of fiery comments from my liberal bretheren regarding the recent “Monsanto Protection Act.” Normally, I try to be sympathetic to liberal politics, but sometimes I can’t help but shake my head in disgust. I expect ignorance from the listeners of Rush Limbaugh. It’s disappointing when the supposedly better educated fall prey to the same gimmicks. It’s worth pointing out that even conpiracy nut Alex Jones has taken on the same position liberals have.

First, there is no such thing as a “Monsanto Protection Act” anymore than there is any such thing as “Obamacare.” This is a term created by the item’s opponents to rile up opposition, rather than foster critical analysis. I think that Liberals should be well aware of the political problems associated with demonizing and reductionist labeling of things they don’t like.

Second, though Presidents can veto any bill that comes across his desk, the veto of appropriations bills are rare, and have often been overridden by Congress in the past. It may be a shock to liberals, but Presidents aren’t kings. Conservatives often don’t seem to understand the three branches of Government. Liberals often appear to understand it even less.

Third, there was hardly “no debate.” A Google search will reveal that discussions of this particular item go back at least to June of 2012 and the “Famer’s Assurance Provision” as it is correctly known is part of another Ag Appropriations bill which passed last year. Anyone who tells you this is new, is either lying, or doesn’t know what they are talking about. (Even Snopes took this on.)

Fourth, there is no evidence (that I’m aware of) that GMO’s, which are already in our food supply, are having deleterious effects on human health or the environment. There have been some studies on mouse models that I know of, but it appears that no one can really agree on what a “GMO” really is. Until we can nail that down, and have more informed discussion of which GMOs are “bad” and which are “good”, I don’t think that screaming about GMO’s is any more productive than poorly informed discussion of complex issues such as climate change.

I’m not trying to suggest that there are no effects of “GMOs” whatever they may be. I am saying that lefties are accepting that there are broad effects without question and are relying on less-than-scientific and politically motivated sources such as Salon and the Huffington Post to inform them. That’s a very, very dangerous position to take.

Fifth, I think we should all know by now that rightists use issues like this to weaken Democratic Presidencies. I was of the opinion that much of the furor over controversial portions of the 2012 NDAA bill was stoked by right wingers hoping for a Achilles heel in the 2012 Obama campaign. When we buy into this type of sensationalist reporting without examining the evidence, we play right into their hands.

Sixth, well, I had a sixth, but lost it. But back to GMO’s: It’s interesting that discussions of GMO’s in Sub-Saharan Africa are opposite of what we hear in the US. People view the American and European opposition to GMOs, some of which have the potential to increase food yield while minimizing inputs, as an infringement on developing countries’ rights of self determination. It’s easy to dismiss their concerns as uninformed. However, people and policy makers in developing countries face competing issues of immediate economic needs and broad environmental concerns. Lots of things seem obvious to us, but then we have most of our basic needs already met.

I mean this not as a defense of the Farmer’s Assurance Provision or anything else having to do with GMO’s (so chill out). The endless (and perhaps deserved) vilification of Monsanto has reached a point where examination of the facts is secondary to screaming like a blithering idiot. To me, this is dangerous. When we reduce ourselves to merely accepting positions without criticism, we allow ourselves to be manipulated by just about anything. Not everyone has the time to read all that is required to create a truly informed and reasoned opinion on all subjects, I realize. Striving toward obtaining as much information as is reasonable, however, and acting critically should be a priority for everyone, however.

Liberals are the smart ones. We can do better.

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Food Prices and Conflict in Sub-Saharan Africa

African Conflict and Worldwide Food Prices, 1997-2013

African Conflict and Worldwide Food Prices, 1997-2013

I decided I’d continue on this theme of African conflict for a bit after noticing some interesting trends in the data.

I’ve written before on the link between unrest in South Africa and the problem of rising food prices. Looking at the plot of the right, it’s not hard to notice the similarities in the series of conflict events post 2005 to food prices as estimated by the FAO’s Food Price Index (FPI).

I began to wonder whether some of the recent rise in conflict events is somehow related to rising food commodity prices. Having found a correlation in South Africa, it’s not out of the realm of possibility.

I calculated the cross correlations between the FPI and conflict events and found that the FPI was predictive of conflict, but that conflict was not predictive of FPI. This was similar to what I found in South Africa.

Plotting the FPI against the number of monthly conflict events, I found something interesting. It appears that the two are mostly unrelated until the FPI reaches a threshold of approximately 200, then the number of monthly events shoots up. It is interesting to note that in other research, 210 was the assumed maximum price that households would absorb before taking to the streets.

I’ve repeatedly written on the problem of stock market speculation in food commodities as a cause for rising volatility in world food prices. I won’t beat this into the ground again. However, results such as these indicate that the problem of rising and volatile food prices is not just an economic problem, but also a problem of human health and welfare.

FPI and Monthly Events with Threshold

FPI and Monthly Events with Threshold

Cross correlations of FPI and monthly conflict events

Cross correlations of FPI and monthly conflict events

Conflict in Africa Getting Worse: A Good Sign?

Conflict events in Africa, 2012

Conflict events in Africa, 2012

Now that the intellectual chaos of PhD defending is over, perhaps now I’ll be able to put together some meaningful sentences.

I started my newfound state of semi-freedom by reading, something I haven’t done in while (outside of papers on malaria). Mo Ibrahim, cel phone magnate and philanthropist was interviewed by the World Policy Journal in the most recent issue.

Mo is responsible for bringing cell phone technology to Sub-Saharan Africa, expanding telecommunications on the continent from a few thousand land lines (outside of North Africa and the country of South Africa) to more than 500 million mobile subscribers today.

The total number of phones in Africa was maybe two or three million fixed-line phones. And this was mainly in South Africa in the south or in Egypt, Tunisia, and Morocco in the north, and nothing in between. Right now, Africa has more than 550 million mobile subscribers. This is more than the number of mobile phones in Europe, by the way. This brought farmers to the market place. It brought new services. Banking now in Africa is done more with mobiles than in actual physical branches of banks. All kinds of services are available cheap like mobile banking services, which are more used there than in Europe or the United States. It improved elections and democracies. The democratic process improved a lot because of the transparency. It encouraged entrepreneurship and economic growth. So a lot of things happened, especially in a place like Africa, which badly needed that kind of service which bridged so many years of underdevelopment, and that is wonderful. With information at their fingertips, people are able to communicate, able to talk to each other. This should bring a better sense of understanding and less conflict.

It was the last sentence that intrigued me. Could the expansion of cell phone coverage in SSA be associated with a decline in conflict? Armed with my statistical tools, I was ready to check test this hypothesis.

Unfortunately, I was unable to find much data on cel phone coverage. It appears that providers are either reluctant to publicize it, or are too fractured to merit a single source of data.

Data on conflict events, however, are reliably stored at the Armed Conflict Location and Event Database (ACLED). I have written on the database before, but hadn’t looked at it since late 2010.

What I found was disturbing. Conflict events have not decreased in SSA. In fact, there are more than ever. in 2012, there were more than 10,000 events recorded, almost double the number of events in 2011. Many of these events were protests (3,292) but there was a disturbing number of events involving state violence against civilians (2,706).

These events are spread throughout the continent, but far too many are occurring in developed hot spots like South Africa and Kenya (as the map shows).

Now, this could be a result of increased recording of events in the database. it could also be a result of the expansion of cell phone technology and the free exchange of information on the continent.

It is clear, though, that wider access to mobile technologies is not leading to peace on the continent, but rather more violence. However, protest is a hallmark of democracy and development. Let’s hope that these protests, as bloody as they may be, lead to wider access to public liberties and stable governance.

Perhaps this is a sign of good things to come? It’s certainly up to debate.

ACLED

The Invasion of Iraq Began 10 Years Ago

The ending to Vietnam was easy to recognize. We have the iconic pictures of the last helicopter on it’s way out to freedom to prove it. The end of WWII came with capitulations from Japan and Germany and a cessation of fighting.

If the media is to act as a guide, the end of the Iraq war (which was really an invasion) is not so clear. I would even speculate that most Americans think that the war is still on in full force. (To be charitable, they might not realize there’s a difference between Iraq and Afghanistan.) Despite this perception, iCasualties, a web site which tracks deaths in Iraq and Afghanistan only reported one military death in 2012 and, so far, none in 2013.

The Iraq Body Count site, however, listed 355 civilian deaths last month. The question is, though, where does the war stop? I find it hard to believe that there weren’t violent deaths previous to the entry of the Americans. A look at the listing of deaths lists attacks in markets and police stations, random roadside bombs.

Most troubling to me are the targeted killings of educators, University employees and academics. Though it may be unpopular to say so, there comes a point where we can’t blame ourselves any longer. Reading this list, I’m thoroughly disgusted. Hate the Americans if you will, but the killing of teachers and kids is inexcusable.

There is no doubt that the war was a colossal waste of resources, begun under intentionally fabricated pretenses for reasons which still remain mysterious to me. I sincerely doubt Bush had the intellectual faculties to come up with it on his own. The blame for the war goes to people like Robert Zoellick, Francis Fukuyama and Paul Wolfowitz and Donald Rumsfeld all members of the “Project for the New American Century,” a group which pressured Clinton to invade.

The saddest part is that the war was massively expensive, we haven’t really even begun to pay for most of it. The money came from low interest bonds. Of course, with inflation outpacing the interest rate on those bonds, we might not ever have to.

The Washington Post put it rather well:

In relative terms, the Iraq war has been fairly cheap by historical standards, costing about $120 billion a year or around one per cent of GDP, compared to 45 percent of GDP for World War II. In absolute terms, however, the Iraq war is the “second most expensive war” in American history after World War II. According to Hormats, it has been financed largely through the issuing of treasury bonds, 40 to 45 percent of which have been bought by foreigners

These treasury bonds were bought at rock bottom interest rates, I might add (again). To be honest, I get annoyed when liberals start screaming about how expensive the war was. Perhaps they don’t know what a bond is but the absolute expense isn’t the problem. The scary part is (as it states above) that the war, in relative terms to GDP, won’t cost us hardly anything. This lack of financial pain just makes it easier for us to do it again in the future.

I wrote a couple of posts on Iraq back in 2009. A spatial analysis of the Iraq casualty data here, a time series analysis here and a movie here.

HRW did a great piece on torture and human rights abuses in Iraq.

I’ll include the movie here for posterity:

Complexity in Markets: a few random thoughts

20130318-174856.jpgI was just checking out an article by Mark Buchanan on Bloomberg about the need to abandon the idea of economic markets as being inherently stable.

For several decades, academics have assumed that the economy is in a stable equilibrium. Distilled into a few elegant lines of mathematics by the economists Kenneth Arrow and Gerard Debreu back in the 1950s, the assumption has driven most thinking about business cycles and financial markets ever since. It informs the idea, still prevalent on Wall Street, that markets are efficient — that the greedy efforts of millions of individuals will inevitably push prices toward some true fundamental value.

Problem is, all efforts to show that a realistic economy might actually reach something like the Arrow-Debreu equilibrium have met with failure. Theorists haven’t been able to prove that even trivial, childlike models of economies with only a few commodities have stable equilibria. There is no reason to think that the equilibrium so prized by economists is anything more than a curiosity.

It’s as if mathematical meteorologists found beautiful equations for a glorious atmospheric state with no clouds or winds, no annoying rain or fog, just peaceful sunshine everywhere. In principle, such an atmospheric state might exist, but it tells us nothing about the reality we care about: our own weather.

This is true. Markets are inherently unstable beasts,as was proven by the crashes of 2000 and 2007/8. Personally, I am an advocate of free markets. The trouble is that no one can agree on what a free market is.

I recently watched a compelling lecture by development economist Ha Joon Chang, where he pointed out (rightly) that “free markets” are truly in the eye of the beholder, pointing out that even the most ardent of free market supporters in 2013 wouldn’t support the free marketers and libertarians who complained of the implementation of child labor laws in the early 20th century.

I should say, then, that I’m an advocate of the “freeest markets within reason” or “the freest markets as will support the moral ideals I hold to be important.” That is, the freeest markets as will support the protection of individual rights to freedom of expression and political thought, the preservation of equal opportunity through education and health, access to capital and social mobility.

Mr. Buchanan points put that where other sciences have accepted that there is no such thing as stability in the rest of the universe, desperate economists and their politically backward fans stick to the idea that, despite evidence of the irrationality of humans in every other space, markets are “self stabilizing.” That humans are rational (they are not) and customers can democratically select optimal prices vs. availability (untrue).

First, I am drawn to the incredible volatility of prices in areas that have the least power to influence them (developing countries).

If there were ever an example of the undemocratic nature of unbridled markets, food in developing countries would be it. Buyers and sellers are legion, yet bodies across the sea set prices with little regard to the demands of the many. In Sub Saharan Africa, stability is a fantastical dream.

Second, I am thinking of the work being done on complex systems in finance, specifically that coming out of Princeton at the moment.

SOME people aren’t waiting around with their heads in the sand, but rather are working to describe the phenomena of finance volatility, noting the increased complexity of financial markets in 2013. It would seem that deeper linkages between financial systems, though necessary, induce the very real problem of volatility. Ignoring it or pretending it doesn’t exist won’t make it go away.

Blaming government regulation and calling for a return to 19th century finance doesn’t work well either.

But that’s enough….

More on Financialization of Food Commodities

I’ve written at length on the issue of the issue of financialization of food and price volatilities. Yet, when I bark about the subject, few around me seem convinced (and that’s ok, I’m never very convincing).

I found a cool video that sort of lays the issue out and explains the mechanics behind the world food trade system, and why the increased role of speculators is wreaking havoc on the world’s food prices. The common narrative is that issues of supply (droughts) and demand (bio-fuels, China) are the culprits.

Intuition might confirm this, and it is logical to assume that pressures on a limited supply of goods would lead to increases in price, but intuition is only as good as the amount of information possessed. The trouble with narratives that involved financial markets is that some knowledge of finance is required. Finance usually bores people to tears. Videos like this are a great step.

Supply and demand factors can explain gradual increases but can’t explain volatility in food prices. Rich people like us have no problem absorbing even a 200% increase in food prices. People living on a dollar a day have to make some pretty dire choices, and children end up malnourished.

The video gets a few things wrong. Namely, it states that speculators began seeking new investment areas and sources of growth after the bursting of the property bubble in the late 00’s. This is untrue. Speculators began trading in food commodities after a relaxing of rules during Clinton and the bursting of the tech equity bubble of 2000.

To me, this and the commoditization of water is the most important issue of our time and will have grave implications for the world’s future security.

Anyway, check out the video:

ENOUGH

Big day today: submitted dissertation draft then submitted paper for publication, getting ready to submit another.

I can’t wait to get back to reading about economics. Writing is fine, but retroactively creating a story that somehow some non-related things are related is unpleasant. Please don’t do it at home.

I’ve figured out, though, that this is what people who write books do. If you keep revising, eventually it all makes sense.

I had some time today to read the news. I learned that the Bank of Korea is headed by a lady, which is awesome in Korea/Japan. I CAN’T EVER IMAGINE JAPAN HAVING A FEMALE PRIME MINISTER let alone a female head of a central bank. Significantly less developed Thailand even has a female head of state.

In many ways Korea is behind, in many ways, they are way, way ahead. I believe, though, that women have given up on the establishment in Japan, and just go ahead and do their own thing.

This headline, though, was disconcerting:

“Bank of Korea’s Suh Shuns Schoolgirl Outfit to Tackle Contagion”

Huh?? I read the article, and it appears that it was an OL outfit, not a schoolgirl outfit, but the headline was like, “huh?” Yes, I’m losing IQ. Too much writing.

I’ll say it again: JAPAN WILL NEVER HAVE A FEMALE HEAD OF STATE OR HEAD OF ANYTHING ELSE. And that’s a miserable, depressing and embarrassing state of affairs for the second largest economy (we can ignore China) in the world and one of the most developed places on earth.

Better yet, was thsi article, “Is Paul Ryan an Inflation Nutter?” Of course, the answer is an emphatic YES along with the entire Tea Party/Libertarian (オバタリアン?)set (sorry Ralph, you know I love you). Despite ZERO evidence of runaway inflation, even in the worst economic crisis since the depression, doom and gloomers have been predicting it all along. We got 99 (million) problems, but inflation isn’t one.

It’s like waiting for the rapture. The US is stronger in reality than Americans would like to think.

OK, I’m going to go and stare into space for a while. This LaTeX infused Alzheimer’s has got to go.

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