Ben Muse

Singapore Girds for Global Warming

The International Herald Tribune, and Emmanuel at the International Political Economy Zone, are following the story: Will We See Singaporean Seawalls? (August 30).

Relief for Manhattan's Farmers

An e-mail from Massachusetts asked this: “As a middle class taxpayer in the Northeast, why should my hard-earned tax dollars go to support wealthy farm owners in the South versus feeding the hungry in this nation? What is another example where the government pays welfare to a wealthy American?”

“I don’t know I envisioned payment limits getting as much debate as it has,” said Johanns [the Secretary of Agriculture - Ben], who produced a map showing a red-dotted Park Avenue in New York City.

"Is Trade Good for Your Health?"

Theory doesn't tell you what impact more liberal trading rules will have on public health.

Lower tariff and non-tariff barriers to trade may reduce the cost and increase the variety and quality of available health related goods and services.  Increased average incomes may increase the demand for those goods and services.  Ideas and best practice may spread with trade.  If trade creates profit opportunities, and stimulates investment and growth, it may contribute to increased incomes and increased demand for private and public health goods.  Increased foreign investments by multinationals may be associated with better working conditions.

"Why are Places Located On Cape Cod That Way?"

Here's a neat middle-school/high-school lesson plan on geography/geology from Tom Vaughn: Why Are Places Located On Cape Cod That Way?.  Vaughn tries to get students thinking about the glacial geology of the Cape, and how that's shaped modern settlement patterns.  Some of the students who go through this would learn to see a little better. 

Increasing upward earnings mobility for U.S. women masking declining mobility for men

Wojciech Kopczuk, Emmanuel Saez, and Jae Song exploit social security data to explore trends in inequality and income mobility in the U.S. since before WWII: Uncovering the American Dream: Inequality and Mobility in Social Security Earnings Data since 1937 (National Bureau of Economic Research working paper, August 2007). Here's the abstract:

Do rising incomes lead to democracy?

Do rising incomes lead to democracy? Daron Acemoglu and his co-authors fail to find "a significant causal effect of income on democracy": Reevaluating the Modernization Hypothesis.  ( also available as a National Bureau of Economic Research working paper - Reevaluating the Modernization Hypothesis,  August 2007). 

Here's the abstract:

Allocating scarce resources among competing transportation projects

When the last transportation bill became law, it contained an earmark for an interchange south of Ft. Meyers, between Southwest Florida's I-75, a key regional highway, and Coconut Rd. 

Because a controversy rose about the funding of this interchange, many interesting facts about it are becoming public.  The story is a - hopefully atypical - case study of the political allocation of scarce resources among competing ends.   

This post is based on the newspaper stories and on a special expert report on the earmark in question.  This story is developing, and there are twists, turns, clarifications, and corrections yet to come.  Moreover, there are gaps, and sometimes inconsistencies, in the newspaper accounts.  This is the way I piece it together this afternoon:

More CFIUS Reform Appraisals

Attorneys dealing with the U.S. process of vetting foreign direct investments for security concerns have been busy explaining what the recent Congressional reforms mean for this process (the CFIUS process, named for the Committee on Foreign Investment in the United States, which does the vetting). 

Carl A. Valenstein, Josh Mecham, Rebecca S. Hartley and Natasha Christensen of Thelen, Reid, Brown Raysman & Steiner have a relatively pessimistic take: United States: Amendments To Exon-Florio Process Made By The Foreign Investment And National Security Act Of 2007 May Have A Chilling Effect On Foreign Investment In The United States (August 23). 

This is a nice article with useful background to the reform, a reasonably detailed description of the changes, and a short concluding analysis.  While many believe the reforms will lead to less politicization of the process, these authors do not:

Finally, because of the enhanced reporting by CFIUS to Congress and, notwithstanding the confidentiality safeguards, the Exon-Florio review process is likely to become more politicized and any foreign investor engaged in a transaction involving critical infrastructure or technology should be prepared in advance not only with a legal but a governmental relations strategy.

Noel J. Francisco and Bevin M.B. Newman of Jones and Day provide a brief description of the changes with no analysis: United States: Congress Reforms CFIUS Review Process (August 22).

There have been other assessments.  Click on the "CFIUS" link in the topics list in the right column for more links.

Sugar Policy Survey

Remy Jurenas surveys U.S. sugar policy(Sugar Policy Issues, Congressional Research Service, July 16, 2007). 

This is a good overview of the broad outlines of U.S. sugar policy, with attention to issues raised in recent trade negotiations and to current debates over the farm bill. 

Here's the abstract - reorganized somewhat:

Congress and trade - where things stand

Daniel Ikenson surveys the status of trade legislation in the current Congress, over at Cato-at-liberty: Summoning the Ghosts of Smoot and Hawley (Cato-at-liberty, August 22).   

This is a very useful overview.  Ikenson is worried, "This Congress, more than any in my lifetime, is apt to upset the apple cart in ways we may regret for years to come."

Another upbeat appraisal of this year's CFIUS reform

David Marchick and David Fagan think this year's reform of the process by which foreign direct investment is vetted for national security issues (done through Treasury's Committee on Foreign Investment in the US, so the "CFIUS" process) was done well: Rational security (TheLawyer.com, August 20).  The authors - attorneys at Covington and Burlington - provide a brief but useful analysis of each of the major revisions. In sum:

The Race for the Arctic

Last week the Russians dropped placed a Russian flag on the seabed below the North Pole.  This was a stunt - drawing attention to a significant technological capability - but in itself without legal implications.

The world is now aware, however, that a contest is on for territorial and seabed rights in the Arctic.  Much of the argument revolves around the underwater Lomonosov Ridge.  Here is a map of the ridge from Wikipedia.  You can see the long line of the ridge extending across the top of the world from the Russian to the Canadian/Greenland continental shelves:

"Remembering Nagasaki"

Tomorrow is the anniversary of the atomic bombing of Nagasaki: Remembering Nagasaki (ROK Drop Blog, August 8).

Managing Arctic Fisheries

As the summer Arctic ice cover shrinks, all sorts of natural resources are becoming available (Global warming is reducing the costs of mining in Greenland, July 16; ”We must prove the North Pole is an extension of the Russian continental shelf”, August 1).   The ownership, control, and government of these resources are now becoming important issues. This goes for fisheries too.

Alaska Senator Stevens has just introduced a resolution calling for: "the United States to initiate efforts with other nations to negotiate international agreements to better manage migratory and transboundary fish stocks in the Arctic Ocean": Senator Stevens Introduces Resolution to Protect Arctic Fisheries (press release, August 3).

The North Pacific Fisheries Management Council is considering creating a fisheries management plan (FMP) for the Arctic regions under its jurisdiction.  Here's an excellent discussion paper: Fishery Management Options for the Alaskan EEZ in the Chukchi and Beaufort Seas of the Arctic Ocean – A Revised Discussion Paper (Bill Wilson, North Pacific Council, April 2007). 

Exports and productivity

Reuben Hernandez-Murillo writes about the characteristics of U.S. exporters in the St. Louis Fed's August National Economic Trends: U.S. Exporters: A Rare Breed.

He notes that relatively few U.S. firms are involved in exporting: in 2000, out of 5.5 million U.S. firms, only 4% export, and 10% of these account for about 96% of exports.

He goes on to point out that exporters are distinctive.  Compared to firms that don't export: they have higher value-added per worker, higher total factor productivity, ship larger volumes of products, use more skilled labor, use more capital, use more advanced technology, pay higher wages, and are more innovative.

Data indicates that exporting firms have higher productivity, but not higher productivity growth, implying that it is the more productive firms that begin to export. High entry costs to the export sector may deter less productive firms. Exporting firms do appear to have more rapid growth in employment and output.

Reducing the costs of entering export markets can lead to an increase in aggregate productivity within the economy:

More on the Senator Stevens Investigation

Erika Bolstad and Richard Mauer report on the ongoing investigations into Senator Stevens (Stevens probe is expanding , August 1) for the Anchorage Daily News:

”We must prove the North Pole is an extension of the Russian continental shelf”

...says Mr Chilingarov, “We will be the first to plant a flag there. The Arctic is ours and we should manifest our presence.”   

Chilingarov is a Russian Arctic explorer and the deputy speaker of the national parliament:  Russia raises stakes over Arctic seabed.  (Isabel Gorst , Financial Times, August 1).

Global warming is making much of the Arctic more accessible, and there may be oil and gas under the sea bed: