The List: China's Wealthiest Individuals

Though a more complete list will be available in a few weeks, we thought the Top 5 from China's rich list might be worth a sneak preview. A list of the billionaires as well as brief bios can be found here.

Congress FAIL: No Budget Passed Before the Break

Democrats and Republicans were able to agree on very little before heading home for the campaign trail. Unfortunately one of the items on the menu was the budget for the upcoming year.

However in eschewing any tough votes before they break, lawmakers had at least one motivation in common, according to Senate leader Harry Reid, 'We may not agree on much, but I think, with rare exception, all 100 senators want to get out of here and get back to their states.' Impressive. Read more about the lack of action here.

Striking Spaniards Leave Country in Gridlock; Provide Lessons for the US?

Greetings from Europe where your humble author is about to embark upon a two month internship in what may or may not end up being his profession (though if he is going to eventually be able to pay for the loans he took out to spend what will ultimately be 3+ years figuring it out, he will have to find a pretty good replacement if the 'may not' scenario comes into play). As such, he is certainly well-placed to discuss the current state of affairs in Spain, though luckily not highly impacted by them. At least not yet...

Spain is in a state of general strike. For those unfamiliar with what a general strike looks like, check out some amazing photos here. Citizens of the Iberian state as well as others around Europe (most notably Belgium) are striking because they are unhappy that, in the face of crippling deficits, the government has decided on cutbacks and some changes to the retirement system, including an increase in the retirement age by two years to 67. While it is true that the strikers and demonstrators around the capital and elsewhere echo the pain of their Hellenic cousins from earlier this year it is also true that they share their shortsightedness. This, of course does not make the situation any easier to fix, but can provide lessons for the future.

Spain, like Greece, is in rough economic shape. Nobody can honestly deny that. However, though they cannot deny it, Spaniards and Greeks would like to ignore it. They want to keep continuing to pay for things without having the funds to do so. This is clearly untenable. Either nations make changes in these situations or they risk collapse. In the end, reforms will very likely be made, but with some critical ones likely sacrificed at the altar of the people and left for the next generation to address. Immediate problem averted, things will return to a state of relative normalcy. This will be no more than a stopgap, though, and will predictably lead to additional problems in the future.

There should be some familiar themes in this analysis for American readers. There should be some lessons to be learned as well. A nation collectively standing on the edge of an abyss is never in a mood to look to the future; there are much more immediate concerns to address. Therefore, though it is always painful, needed reforms are sometimes easier to implement when a nation is not in its most dire state. American lawmakers would be wise to take notice of this as the US comes out of its current economic malaise. And though changes to social security, retirement ages, and budget cuts are never popular with voters, citizens would be wise to allow lawmakers to make necessary changes before violent protests occur, and not while they are in progress.

Though the sanctity of the dollar as the currency of reserve affords some protections that individual countries in the EU could never count on, this doesn't mean that current account deficits and the limitless spending of its government will never catch up to Americans. It is time for Americans to realize that the current state of the union can not indefinitely remain its equilibrium. Otherwise the next round of dramatic photos might be coming from the National Mall rather than the streets of Brussels and Madrid.

Op-ed: Another Chinese Camp Death Calls Motivations Into Question

Long time readers may recall a posting from about a year ago about the beating death of a teen at an internet reform camp in China. Parents bring their children to such camps to help them break addictions to the internet. Until that point, it was either an unwritten rule that it was okay to use corporal punishment to 'help' the youngsters or it was merely overlooked that camps were doing so. Following that tragedy, however, the use of physical punishments at the camps was supposedly banned.

Enforcement of that law and its preventative impact are sure to come under scrutiny however following reports of a second death. In the latest incident, a 16 year old was allegedly beaten with a plastic pipe, a wooden baton and handcuffs after his refusal to participate in a running excercise. Chen Shi was at the camp after his mother convinced him to go by telling him she was bringing him to study IT. Chen Shi was only at the camp for two days before he died.

The situation highlights some of the problems facing China in its ascent to the status of true global superpower. While its economy is opening up and its middle class is expanding rapidly, the authoritarian nature of the state continues to cause problems on both the local and national stages. While spending time in America, foreigners might be shocked to see how much television, computer and video game time is spent by the country's youth. As an American myself, even I am shocked to see it. This has lead to direct problems with the health of the nation, as children will often spend hours playing a football video game instead of playing football.

However, in China, it is not clear that it is merely a desire to keep the current generation of teens healthy that is motivating a desire to keep them off of the internet. It is very likely that it is merely another form of control placed on the citizenry. As noted above, the law itself should come under scrutiny. However, more than the law itself should be made to stand the glare of the global community. Indeed, it is important to question the motivations behind the infrastructure which necessitated it.

For wouldn't it be possible that children would not become 'addicted to the internet' if there were other sources of information about the outside world available to them? And, even in a nation as large as China, the fact that there is such an overwhelming problem that hundreds of these camps exist gives one pause; just who decided that they were so critical? Why are there no such wide-spread examples of other states feeling compelled to put this type of infrastructure in place?

As pointed out in the original post on this topic, it is very possible that this camp system is no more than an attempt by the state to keep its citizenry under close watch and ensure that its impressionable youth are impressed by the 'right' things. This list would presumably not include reports from western news outlets, video of events embarrasing to the state and even blog posts such as this one. It isn't really so far fetched when one considers China's censorship of Google and attempts to access accounts of activists. And, though the government does not supervise or approve the camps, one is even located on a military base!

The conclusion today remains the same as it did the last time such a tragedy occurred. If China wants to be a fully-fledged member of the global elite, civil reform and openness must play a role in the transition. If not, investors, politicians, and its own citizens will remain weary of the sleeping dragon. Internet reform and access to information are only two areas where improvements can, and must, be made.

Maybe I am Missing the Point?

I really like Steven Colbert. I think his show is hilarious and takes what Jon Stewart has been doing very successfully for a few years to a brilliant new level. The fact that he does what he does in character makes it even more impressive. However, despite his comedic genius, political knowledge and abilities, he is still a character, or perhaps more properly a caricature representing some of the more hysterical members of the media, who hosts a comedy show. On Comedy Central. What, exactly in my description of him makes him an appropriate candidate to speak in front of a Congressional committee on immigration, (in character!!!) is a little beyond me...

I would like to think that maybe I am missing the point, that the time and money of taxpayers wouldn't be spent so oddly as on testimony from a character, that there were some compelling reason to have Mr. Colbert visit the Hill. However, I don't think so. Really, how is this any different than asking someone dressed up as the Jolly Green Giant to testify on farm subsidies, or Captain Planet expounding on green initiatives. And I think that is just one of the reasons that all incumbents, not merely those with a big D following their names, are in big trouble this fall.

UPDATE: This (predictably) turned farcical in near record time...

Does Swedish Vote Signal a New Populism?

Despite all of the fuss about communism in America the past year or two (including at times from yours truly right around the time 'We' became the largest shareholder of a dying automaker), it is true that the US is still nothing close to a bastion of socialist thought. Even if it ends up being nothing more than a Republican spoiler this fall, the Tea Party is a great reminder of that.

However, there are still parts of the world not named Cuba, China or Venezuela which embrace many of the tenets of socialist thought unabashedly. Until a few days ago, Sweden could be counted among this second-level of states which seamlessly integrated socialist ideals into everyday life.  That is, until the nation went the way of fellow EU members such as France, Denmark and the Netherlands in shifting its votes from social democrats and toward Greens, the hard-left and far-right as well as what many in the US would consider to be libertarians.

Paul Taylor of Reuters rightly points out that, 'Technological change and globalization have shrunk the traditional industrial working class and the trade unions, made jobs more precarious and thrown up new issues such as climate change, population aging, immigration, obesity and drugs.' He argues that these factors, as well as the financial crisis and European integration, have had the effect of changing voter allegiances.

While this is all true, Taylor also points out that 'Now that most European countries are burdened with high deficits and debt mountains due to the financial crisis, the "big government" left is not seen as offering a credible answer to the question of where and how to shrink the state.' And this may indeed be the biggest reason for the recent shift in not only the aforementioned EU states, but Britain and the US as well. Perhaps it is reactionary, but the sentiment that more and more government is not the answer to the current malaise is nonetheless a strong one. And it appears that it is becoming increasingly the populist point of view, not just in middle-America, but even in places one might never have suspected as recently as a few years ago.

Google Steps up Fight Against Illegal Pharma

Google was in court Tuesday to file a suit against a group of what it terms 'rogue pharmacies.' These drug companies are typically unlicensed sellers who have taken advantage of the open nature of Google's advertising set-up, bidding for space in the software giant's auction system. It is difficult to know whether Google is really concerned about potential black market drug trading or if it is merely concerned about ending up in court on someone else's terms.

Whatever the company's motivations however, the end result is likely to be a very positive one. Google should be commended for its auction style ad sales format which is both innnovative and lucrative while allowing smaller advertisers to target their potential customers with a great degree of accuracy. However, actions like this ensure that the system isn't used for nefarious purposes without changing what has made it good. It should be a win for everyone. Well except of course the fake drug companies...

Beautiful Game in Danger of Collapse?

Anyone interested in the economics behind the Most Popular Sport in the World could spend their time in a lot worse ways than reading Leander Shaerlaeckens' piece on the financial perils facing many of the world's top soccer teams. The article can be found here.

Shaerlaeckens correctly points out that the leadership teams of many clubs have used debt as a crutch to prop up transfer and wage spending, often to the point where revenues cannot even match these most basic spending requirements. However, he also notes that this will continue so long as regional banks and governments allow it to. Maybe it is a case of 'the rich keep getting poorer,' however it is tough to see things changing until a systemic breakdown occurs, something that seems unlikely so long as fans remain voters.

Vatican Under Fire for Banking Transactions

Dan Brown is no doubt taking a keen interest in the headlines today as the Pope's top two bankers have been placed under investigation for money laundering. Additionally, EUR 23 million has been seized in connection with a suspicious transfer.

The situation will be a blow for the Vatican as, though it remains highly secretive, it has attempted to make strides toward conformity with international banking standards in the past few years. Additionally, it will do nothing to quiet the conspiracy theorists who are never far from the Vatican's walls, particularly considering the interesting history of the bank.

UPDATE: In the interest of equal time, fairness, etc., here is the latest from the Vatican.

James Bond it's Not, But Interesting Nonetheless

Those with a romantic (and false) sense of spy history may be disappointed that James Bond isn't included...however the real man he was modeled after is. That's right, Britain's fabled MI6 intelligence agency has published its first authorized history, covering the years 1909-1949. Following is Richard Norton-Taylor's write-up from The Guardian.

The authors Graham Greene, Arthur Ransome, Somerset Maugham, Compton Mackenzie and Malcolm Muggeridge, and the philosopher AJ "Freddie" Ayer, all worked for MI6, Britain's Secret Intelligence Service admitted for the first time today . They are among the many exotic characters who agreed to spy for Britain, mainly during wartime, who appear in a the first authorised history of MI6. The book even reveals that the intelligence agency's deputy chief, Claude Dansey, was seduced by "Robbie" Ross, said to have been Oscar Wilde's first lover.

It describes the antics of Ecclesiastic, mistress of a German Abwehr military intelligence officer in Lisbon run by "Klop" Ustinov, Peter Ustinov's father. It also tells the story of how a Dutch MI6 agent, Peter Tazelaar, was put ashore on a beach near the casino at Schevening, The Hague, in evening dress, smelling of alcohol and wearing a specially designed rubber oversuit to keep him dry while landing.

Greene, Mackenzie, Muggeridge and others who have written about their secret work make it clear they were reluctant spies approached by MI6 because of their access and knowledge of exotic parts of the world. Others, such as Sydney Reilly, the self-styled "ace of spies", were more gung-ho. But in enemy-occupied Europe during the second world war, many, says Keith Jeffery, author of the official history, were "ordinary men and women" providing information on train or ship movements, for example, and would almost certainly have been shot if found out.

However, while MI6 officers and agents were given weapons training for self-defence, none was given a "licence to kill", according to a note headed "myth busting" distributed at today's book launch. Jeffery said he found no evidence of it in the MI6 files. He does, however, describe the valuable spying activities of Wilfrid "Biffy" Dunderdale, MI6's man in Paris before and during the second world war, who is said to be the model for James Bond. Dunderdale, a friend of Ian Fleming, a naval intelligence officer, is described as "a man of great charm and savoir faire" with a "penchant for pretty women and fast cars".

Jeffery said he found no evidence to support recent claims that MI6 was involved in the assassination in 1916 of Rasputin, the notorious "mad monk" who had insinuated himself into the Russian royal family. "All I can tell is what I found in the archives … If MI6 had a part in the killing of Rasputin, I would have expected to have found some trace of that," Jeffery said. The book does, however, refer to a colourful account of the murder by MI6's man in Moscow, Sir Samuel Hoare – a future government minister – who said he was "writing in the style of the Daily Mail" because it was "so sensational that one cannot describe it as one would if it were an ordinary episode of the war".

Hoare wrote: "True to his nickname ('the rake') it was at an orgy that Rasputin met his death." Jeffery notes simply that Rasputin "was murdered in the early hours of the morning of Saturday 30 December". In his recently published book Six, the author and journalist Michael Smith refers to a number of claims that Rasputin was shot several times with three different weapons "with all the evidence suggesting that [MI6 officer Oswald] Rayner fired the fatal shot, using his personal Webley revolver".

Reilly is another exotic character who appears in the MI6 history, which covers the period from the agency's establishment in 1909 until 1949. Shot by the Bolsheviks, Reilly came to grief by fatally combining politics with espionage, the book suggests. "Reilly was an MI6 agent. He also wanted to assassinate. That does not necessarily mean MI6 tasked him," Jeffery said. MI6 agents could be maverick and "off-message" and less valuable an intelligence asset as a result, he added. Before the D-day landings on 6 June 1944, MI6 officers discussed a co-ordinated assassination campaign in France, the book reveals. Bill Cavendish-Bentinck, chairman of the Joint Intelligence Committee, agreed with MI6 that it would risk bloody reprisals. Nevertheless, if the French liked to "assassinate Germans or collaborators", he added, "we should not deter them".

The official history also shows how Kim Philby, the most notorious member of the Soviet Union's five-member Cambridge ring of spies, was valued and trusted by MI6. Stewart Menzies, chief of MI6, refused a request in 1943 to get Philby transferred to work for the Foreign Office. "You know as well as I do the valuable work which Philby is doing for me," he told the FCO. "Trust is the intangible. Philby was part of the charmed circle," Jeffery said. The attitude towards Philby was that he was a "bit wild, but he's OK now", he added, referring to Philby's open communist sympathies at Cambridge University.

UPDATE: The FT weighed in with a positive review over the weekend as well. It can be found here.

UFO Threat to Nukes?

Readers can chalk this posting up to the theory that if it is newsworthy enough for Reuters, it is certainly newsworthy enough for Blawgconomics. And, despite the difficulty in finding the 'intersection of law and economics' in possible alien encounters, this story is interesting enough to merit a mention on a slow news day. Reuters summarizes it best;

'Witness testimony from more than 120 former or retired military personnel points to an ongoing and alarming intervention by unidentified aerial objects at nuclear weapons sites, as recently as 2003. In some cases, several nuclear missiles simultaneously and inexplicably malfunctioned while a disc-shaped object silently hovered nearby.'

On Monday the 27th, six former U.S. Air Force officers and one former enlisted man will speak about their experiences with these unexplained phenomena at the National Press Club in an attempt to get the government to publicly confirm their reality.

Whether it is little green men or Russian men manning the craft is up to speculation. However, the fact that some highly placed former officers are getting a shot at telling their stories at the National Press Club is notable. We will probably never know everything the government does about such encounters. However, this is a start, and should at least make for some interesting press clippings.

UPDATE: A few days late, but you can get a gist of the testimony here. If anything, it was a bit more explosive than anticipated.

Soros Dodges a Bullet

Billionaire financier and philanthropist George Soros is hoping to have one of the only blotches on an what has otherwise been described as a spotless investment record (though certainly not by anyone affiliated with the Bank of England in 1992) as the European Court of Human Rights is set to rule on an insider trading conviction he received in French courts about 5 years ago. The conviction was based on circumstances surrounding a stock purchase in the late 80's. The curious can read more here.

How November Could Impact Equities

There has been a lot of speculation by pundits recently over exactly how the next round of Congressional elections will shape up. Republicans and Democrats alike are afraid of the influence of the nascent Tea Party. Hardened and battle-tested incumbents are being seemingly indiscriminantly swept up in waves of palpable dissatisfaction. Depending on how things go, the implications for everything from healthcare to immigration are almost impossible to determine, as the election calculus is already incredibly opaque.

However, in the midst of all of this uncertainty at least one investor is making some concrete predictions about what a Republican/Conservative victory this November could mean for the stock market. If this scenario of Republican control plays out, it could be very good for the stock market as the combination of a Democratic White House and a Republican Congress has often proven to be the most fruitful. Here's hoping...

After Long Wait, Warren Given the Keys to the Car

After no small amount of speculation, Elizabeth Warren's appointment to the new Consumer Financial Protection Bureau will be announced later today. Rather than head the agency, Warren will serve as the architect of the new body, allowing her to bypass what were certain to be a tough run of confirmation hearings. This is particularly important in an election year as Republicans were set to pounce on what they perceived to be anti-business comments from Warren in the past, something sure to resonate with voters in a poor economy. Further details can be found here.

A Year has Passed; An Opportunity to Reflect

It was one year ago today that a law student's (potentially misguided and catastrophic) idea to start a blog rather than work on a journal came to its fruition. What can I say...we march to a slightly different drummer here at Blawgconomics. Like so many things in life, it alternately seems both fresh in the mind and a distant memory. Luckily, there have been many people along the way who have contributed toward ensuring that it was/has been an ultimately good decision.

I was going to do a posting detailing some of the highlights of the past year. There have been outstanding contributions on legal regimes in Africa, unstoppable viruses, and electric car batteries. There have been posts which were picked up by major blogs like The Huffington Post. The S-REIT series has received traffic from every continent except Antarctica, highlighting the interest people around the world have in technology, development and green solutions.

However, I am instead going to take a few minutes to expand upon a theme that we have explored a bit in the past; the extent to which technological advances, such as blogging, have contributed toward making the world a much smaller place. While it is true that civilizations have expanded and shared ideas for millenia, and while over the last century advances such as air travel and phones have contributed toward this same end, nothing has changed the world quite the way the internet has. While there are likely myriad statistics and studies on such things, it has taken personal experience with the phenomenon for it to really hit close to home for me.

It was incredible to see traffic from Iceland when I posted about the debt repayment crisis, or England when I discussed pub laws. It was interesting to see how a translation of a post by German friends drove traffic from their homeland. Africans checking in to read about SADC issues was mindblowing. And, it has been nothing short of inspiring to receive visits and feedback from our friends over in China, where there are still controls over the tools of knowledge and where, despite double digit growth rates and a middle class which is growing exponentially, you can still be jailed for expressing some of the opinions I am blessed to be able to express.

I am not sure if the site will last until its next birthday. Life gets in the way, inspiration drifts away, employers get uptight about employee's opinions leaving the safety of their own minds to reside in the public domain (though this is less a problem for the 'job deficient'). However, no matter what happens in the future, the past year has given me a life-long lesson in how touching, how personally rewarding it can be, to reach people. It might be anonymously from across the globe, or it might be a good friend just across the classroom. In the end, it is entirely inconsequential; reaching people is a reward, and the only one I will ever seek for the time I have put into this site. It is merely one of the upsides of the age we live it that doing so is so possible.

Supply and Demand in the Air

At least one company is looking to take advantage of folks willing to save a buck by roughing it as Aviointeriors Group, an Italian firm, is unveiling the SkyRider airplane seat at a conference this week. The company hopes that budget airlines might use the 'saddle'- style seats on short flights to offer potential customers the ultimate in cut-rate travel.

If the seats, which put much of the pressure on passengers' legs, survive the scrutiny of airline authorities, it could impact pricing dramatically and would provide a great example of how variable pricing schemes can be effective.

For the adventurous, the less well-heeled, or simply the frugal, the seats would provide the perfect opportunity to travel to places whose flight price points normally would have been too high. Meanwhile, those requiring a higher level of comfort, or those who simply don't mind paying the higher price points could take the normal seats. It is merely another level to the first/business/economy hierarchy.

Here's hoping that the seats are safe and that some airline takes steps to include them. For someone used to standing during subway and bus rides, concerts, sporting events, etc., the thought of saving on flight tickets while stretching the legs out a bit is a very welcome and appealing option indeed.

Supply and Demand in the Sports World

Erstwhile ESPN reporter and current CNBC blogger/sports business reporter extraordinaire Darren Rovell has an interesting piece up today on how the secondary market for ticket sales is emerging as one of the biggest threats to the profits of the major sports franchises in the US.

This is because, due to technology, it is both easier to price out games and obtain tickets to them at favorable pricing. Therefore, fans are finding less reason to purchase expensive seating rights and tickets to games they may not attend (including the required pre-season games for the NFL) when they can cheaply and effectively purchase tickets to the games they really want to attend.

With fewer season ticket sales, teams are losing seating revenues. In addition, because less seats are guaranteed to be filled, they are having to hire more staff for single game ticket sales, digging even further into profitability.

These could be contributing factors to the declining profitability numbers for NFL teams as well as in the other leagues, and is a trend well worth watching for the sports fan and economist alike.

The Concept of Evil in Criminal Punishment

For an interesting read on way criminal punishment can serve as a reflection on societal norms check out the latest draft of a comparative law piece dealing with American and German responses to crime. The abstract follows:

The gap in harshness between American and German criminal punishment represents a moral disagreement between the two societies: American criminal punishment expresses a belief in the concept of human evil, while German criminal punishment denies that belief.

This paper, after giving the concept of evil some philosophical definition, develops that thesis with six lines of argument. First, contrasting American and German responses to major crime, the paper argues that American criminal law routinely banishes its worst criminal offenders, while German criminal law almost never does. Second, as to minor crime, American law treats misdemeanors as portents of worse things to come, while German law treats them as errors.

Third, in the context of recidivism, America punishes the person, Germany the act. Fourth, with regard to community reintegration, American law approaches ex-cons with a concept this paper terms “residual criminality,” while German law adopts norms of full forgiveness. Fifth, as to capital punishment, America treats the right to life as alienable for wrongdoing; Germany treats that right as inalienable. And sixth – turning here from interpreting criminal doctrine and practice to analyzing the historical record – the paper shows that various players in the American criminal system have given voice to the belief in criminal evil, while major players in the German system have expressly denied that belief.

The paper concludes by asking which system is more just, arguing that German criminal law is naive for denying the existence of evil where it should be acknowledged, while American criminal law is reckless for rolling genuine evil together with mere error and failure and punishing them all alike.

Q&A with Austan Goolsbee

No, Blawgconomics has not gotten its first scoop. In fact, we probably never will...

However, we are happy to repost a repost of an interview that the folks over at Freakonomics did with Mr. Goolsbee, the newly appointed head of the President's Council of Economic Advisors.

You are unlikely to find anything earth shattering here, but there are some interesting answers nonetheless.

For more on Mr. Goolsbee (as well as a taste what made him 'Washington's Funniest Celebrity'), check out this old clip from a Washington Improv show:




UPDATE: The Funniest Man in Washington is at it again...

Reading up on the New World Order of Banking

For the curious, here is the best article I have seen on the newly created global banking requirements.

After a lot of complaining from bankers, the regs are a little lighter than they might have been, though raising reserve and capital requirements will still undoubtedly cut into profits. Individual countries, including the US, will still need to codify the regulations into their own legal systems, which could take some time. However, post-financial crisis, it should not be that difficult for most legislative bodies in the developed countries to get, at the very least, close approximations passed.

UPDATE: Some further info on the new regs, including video analysis. It seems as if the markets appreciate that the rules don't go overboard and the long timelines banks have been given to implement changes.

Global Warming Joins the Fight Against Global Piracy

Loyal readers know that Blawgconomics has, to put it mildly, an interest in pirates. From a youth spent recreating high seas battles with Lego to an adulthood studying international law's handling of modern piracy issues, the scourges of the seas have never been far from the imagination of your humble author. Increasingly Blawgconomics has found itself accompanied in our interests as technology and access to weaponry have made one of the world's oldest professions a bit more lucrative, and thus prevalent of late. Anyone who doubts this need only look to pop culture for examples.

Though it has been nostagically satisfying to see pirates being splashed across the headlines lately, there are also some problems with the rising trend, including dirty business such as kidnappings, ransoming, high-risk rescues, shipping losses, etc. This has made the powers that be unhappy, and well, suffice to say that with the recent global increase in piracy has naturally come an inevitable global increase in fighting piracy. And those policing the seas have found no less an ironic ally than global warming to assist in the effort.

Many of the areas most afflicted by piracy have, at least in part, geography to blame for their troubles. Bottlenecks in shipping lanes around less affluent nations provide one such example. Therefore, any way that shippers could avoid bottlenecks in shipping lanes around less affluent nations would obviously go some way toward alleviating the threat of piracy on those voyages. Crews would be safer, shipments would be more dependable, insurance payments would decrease. A win-win for all parties involved (except, of course, the pirates).

Perhaps recognizing this, or maybe feeling a little jealous of the increased media coverage global piracy has received of late, global warming has stepped up to the plate in a bid to facilitate travel in the last place pirates would look for booty...the Arctic Circle. That's right, the 'alleged' systematic rise in global temperatures has opened up new shipping lanes up north that are free, at least for now, from the scourge of piracy.

Perhaps if Al Gore could be talked into spending some time doing something beside increasing his carbon footprint for a few minutes, even he would agree that global warming has a place in today's pirate-infested society.

Arms Deals Can Raise as Many Questions as They Answer

After The Wall St. Journal reported that the US is planning to sign a $60 billion arms deal with the Saudis, it seemed a good time to reflect on what, exactly, this means.

Very technically, it means that the President will formally notify Congress, which will review the plan. After some horse-trading, the deal will most likely be stamped by lawmakers and put into place. The Saudis will then be authorized to purchase the up to $60 billion of aircraft. Analysts expect that it will be some time before they actually meet that quota, but that top-line number would represent the largest signed deal in US history. 

Very strategically, it means that the US is (continuously) employing a strategy of arming allies against countries such as Iran in the hopes that 1) we will keep up good relations with those states and, 2) they will serve as a deterrent to Iranian military action in the area without a direct showing or use of force on the part of the US.

All seems reasonable enough. Deterring a potentially dangerous enemy without boots on the ground is certainly an attractive option particularly considering the current state of military affairs. However, and despite the fact that Blawgconomics is often critical of comment sections on web articles, a quick scroll down the page linked to above shows that some folks around the world have perhaps a better grasp of history than some US leaders. Two names that seemed to keep coming up were Iraq and Afghanistan...

This certainly is not to say that, like these others, Saudi Arabia will be anything less than a staunch ally anytime in the near future. However, the fact remains that most of the military actions the US has taken in the past few decades, whether on a large- or small-scale, were taken against enemies who had some old US issue among their equipment. Just food for thought...

The List: The World's Most Competitive Economies

From the same folks who bring you the annual Financier's Prom (aka Davos) comes the latest Global Competitiveness Report. The World Economic Forum's report, a ranking of the world's economies, takes account of such factors as education systems, innovation and infrastructure among others.

Hurting the US, which dropped to fourth from second, were factors such as declining faith in both the public and private sectors and rising deficits. America was ranked #1 as recently as 2008. Perhaps most shockingly, the Swiss-based outfit ranked Switzerland the most competitive global economy.

A New Foreign Policy Tool: Public Talks

As our loyal readers might imagine, Blawgconomics doesn't go too far toward paying the bills for its contributors. Sometimes this makes finding actual sources of gainful employment imperative in a world of bills and student debt.

One such opportunity arose recently when we were able to do some work for the Institute for Public Dialogue on its Public Talks project.* Public Talks is a new, technology-based approach to diplomacy that could serve as a tool in the ongoing struggle to promote peaceful resolution to conflicts. You can learn more about the project here, while I have included an Op-Ed piece from founder John Connolly that I suspect you may see in your favorite newspapers soon below:

As the arc of Middle East talks bends through inevitable difficulties, various proposals will be put forth.

One proposal, advanced here, is for President Obama to take the long view of history by calling on the U.S. to create another form of international negotiations. Establishing this new paradigm would require a longer timeline than the one year established for these talks, yet it could set the stage for a new way of looking at the process of negotiations. And this could influence these current talks.

“Public Talks” constitutes a level communication playing field between two adversaries that would be shaped by formal rules and terms.

Developing this process requires an internationally recognized overseeing body, such as the State Department, to invite representatives of various nations and organizations to ensure widespread acceptance of this new structure. This body would define when recourse to Public Talks would and would not be appropriate.

Public Talks is a universal process with potential application in a wide range of issues where traditional negotiations have not been successful. Events surrounding the initial development of this world communication process will make this alternative well known before it is ever used.

The party most dissatisfied with the status-quo would be most likely to initiate Public Talks and potential examples of failed negotiations are many. Some different types of unresolved issues: Sunni-Shia in Iraq, Russia-Georgia and Burma-the opposition. This public negotiating process could also be used to address large scale economic issues such as climate change and trade.

The central communications instrument is a series of magazine-size "Dialogue Documents" from 8 to 16 pages distributed primarily online. In directly affected regions, a local print media could distribute hard copies. The international community would have access through the Internet and one or more large media outlets.

This challenge media would feature each side's interpretation of history, questions to one's adversary, negotiating positions and content relevant to international conflicts. Later stages of this process will focus on the negotiating tradeoffs necessary to reach agreement.

Wall St. Set for More Cuts

The banking industry shed about 330,000 jobs during the recent financial crisis. If at least one analyst is correct, another 80,000 could shortly be following as revenue growth at the largest banks in the developed world begins to slow. Meridith Whitney, who predicted Citi's dividend cut in 2007 and has subsequently gone on to start her own firm, also believes that cuts will come after what is likely to be a subdued bonus season.

While offices in developing markets may continue to hire, it is believed that the impact of slowing growth and regulatory changes in the US and Europe will be too great to be counterbalanced by the positive impact of the more rapidly expanding regions.

When Common Sense Rules the Day

It's nice to know that, even if it is in the rare case, the legal system can sometimes produce common sense results unmuddied by odd hypotheticals and out-of-date notions. Unfortunately it sometimes takes going abroad and searching alternate legal systems to find examples, but it nonetheless feels like the German court in this wrongful firing suit got things right.

You see, Mr. Oliver Beel lost his job after he plugged in his electronic Segway vehicle and cost his firm nearly 2 euro cents in electric charges. Trimming the fat and eliminating wasteful spending are one thing, but Blawgconomics agrees with the court that firing a man after 19 years of employment over a few pennies is a bit disproportionate.

The SunEdison Solar Glossary

Based on analysis of traffic to the site, it seems that the general public's appetite for knowledge on solar development issues remains unsated. While we will certainly continue to post articles like the Solar REIT series as often as practicable (and so long as we can continue to come up with novel things to say, not always an easy task) they are frankly very time consuming and complicated endeavors. And, as interesting as that work can be, it is sometimes the simple things that prove to be the most useful.

In that vein, we thought it would be worth putting up a link to SunEdison's Solar Glossary, a tool which could be as useful to those needing a refresher as to those exploring solar topics for the first time. There is the not insignificant factor that the work was done for us as well...

A Dose of Bitter Medicine After a Long Weekend, or: The Return of Dr. Doom

There is nothing quite as good at bringing one down to earth after the high of a long weekend celebrating the laborers of America than reading a transcript of the latest economic forecast of Nouriel Roubini.

Unless of course it is video of the latest economic forecast of Nouriel Roubini...

Potential Bank Failure Sign of Bigger Problems in Afghanistan

The lesson that sometimes the hardest work comes after the 'mission accomplished' posters are hung is an oft-repeated one, and one that was most recently learned in Iraq. And oh how history repeats itself.

In a developing situation that proves that, once again, America is much better at toppling regimes than building the infrastructure of society far from home, the largest bank in Afghanistan is close to failing after an old-fashioned run that would have done the cast of 'It's a Wonderful Life' proud. American leaders believe that the bank, an alternative to the loose collection of hawala money exchanges which are suspected of funneling illegal funds in the Afghan economy, is critical to the development of infrastructure in the war-torn state.

See here for more details, including some information on the complex and interconnected web of bank managers, shareholders and borrowers as well as the politicians who seemingly fall into all the other aforementioned categories.

Is Your University Complying With the New Textbook Law?

This post from the Freakonomics blog is worth a read for anyone returning to campus this fall. Professor Ian Ayres explores a new and little-discussed federal law mandating certain disclosures about textbooks in an attempt to provide transparency and hopefully greater efficiencies in this huge market. In broader terms, it is an article discussing some of the potential economic impacts of legal actions. Right up our alley, of course.

Based on the comments, it appears that many schools are not in compliance with the law, which has admittedly weak repercussions for lack of compliance. As is the case almost any time there is a law that harms profits and has no consequences for non-compliance, particularly one that is being widely ignored, it is fairly likely this trend will continue.

Come to think of it, maybe Professor Ayres' article is less a good example of legislation stimulating positive economic efficiencies and more an example of how cheaters can benefit from gaming a poor enforcement regime...

The Case of the Missing Painting

Whether it is the Friday morning after a 'bar-review' social, the day after a little-too-celebratory victory dinner or a Tuesday, many law students, lawyers and other normal humans have experienced the bitter aftertaste of a brutal hangover. Suffice to say, however, that even their worst headaches, nausea and listlessness can't compare to what James Carl Haggerty felt the morning he woke up sans the $1.3 million painting he had been entrusted by a friend to sell.

Minority owner Kristyn Trudgeon is hoping to recoup the cost of the painting according to the lawsuit she filed in New York recently. Though it is unclear what the ultimate outcome of the lawsuit will be, here's hoping it goes to trial so we can all look forward to more gems such as Haggerty's statement that he "could not recall (the painting's) whereabouts" because he "had too much to drink the previous evening." Blawgconomics is not necessarily barred in New York, but nonetheless gets the feeling that being drunk is not exactly a valid defense to negligence there...

Exploring the Outer Limits of the Usefulness of Criminal Justice Theories

Very few people who have experienced first year criminal law classes in the American law school system would be surprised to hear about a professor posing a series question about the potential for rehabilitation or retributive legal theory based on an extreme set of facts, either real or imagined. Maybe then it should not be that surprising that professor and blogger Douglas A. Berman used the real life example of the so-called Craigslist Killer and his sentencing-day suicide to illustrate a point about utilitarian theory.

Despite this, Berman's point, that the suicide of the accused was pleasing to him, as by, 'killing himself, Markoff saved a lot of time, money and energy for those who would be tasked with prosecuting and defending him,' has struck a bit of a chord both with commentors on his site and other blogs such as Above the Law. While some agree with his assessment that society is better off after the accused took his own life, others argue that the result is less than satisfying.

Assuming the accused had committed the crimes he was suspected of, it is difficult to know whether or not this was a 'good' outcome in this situation. While the killer will certainly never take someone else's life, he also took justice out of the hands of the system, creating any number of problems for anyone who believes in rehabilitation or that the system can act as a deterrent. Retributivists should also be torn over the result, probably at least in part depending on whether they adhere to the theory due to its biblical roots or for some alternative reason.

It also seems that the family believes that it has been robbed of closure (though it is tough to see how it could truly ever get closure in a case such as this one). If the accused were mentally unstable, maybe his suicide does not even serve to validate utilitarian theory. It will remain difficult to know for sure without the benefit of the illuminating light of a trial.

Perhaps we can all agree that this is/was an awful situation for all of the families involved. Maybe it just goes to show that not all things in the criminal justice system fit nicely into the parameters provided by first year criminal law classes, and maybe that sometimes life is a little more complicated than text books would have us believe.