Minor illusions

“With or without the depression Wallace Carothers would have invented nylon.”
—Alexander J. Field, A Great Leap Forward

By Arnold Kling

One of the themes of Alexander J. Field's impressive new book, A Great Leap Forward: 1930s Depression and U.S. Economic Growth, is that technological progress did not come to a halt during the Great Depression. On the contrary, he claims that the 1930s were the most technologically progressive decade in our history.

Field poses and attempts to answer interesting questions using straightforward number-crunching and reasoning, rather than resorting to obscure mathematics or advanced statistics. The result is a book that represents the best of what economics can be. I will attempt to sketch some of his key ideas in this essay, but I recommend the entire book to anyone with an interest in U.S. economic history, macroeconomics, or economic growth.

Field describes the last 90 years or so of economic history in terms of six eras: the Twenties, the Depression, World War II, the Golden Age, the Slowdown, and the Tech Boom. These are summarized in the following table.

Field devotes at least one chapter to each era. He chooses the endpoints for the eras as cyclical peaks. This reflects a presumption that there are two broad factors affecting productivity: a cyclical factor, which reflects the state of aggregate demand; and secular factors, which vary by era, that affect the supply side of the economy.

Nearly the entire book is concerned with interpreting the secular or supply-side factors. Only one chapter looks at cyclical patterns, where Field finds a positive relationship between productivity and the level of labor utilization. His hypothesis is that most firms are optimized for a high level of output, so that productivity falls when the economy slumps, due to lower utilization rates for fixed assets, such as warehouses and hotels.

One interesting question, particularly given the current slump, is whether downturns have permanent economic effects, for good or ill. Field concludes that the inventions and innovations that drive changes in the standard of living seem to be independent of cyclical forces. However, this answer is already so embedded in his basic assumptions that the issue can hardly be called decided.

What if you had to buy American?

It might be supremely patriotic to stop purchasing imports, but the consequences for US consumers and the economy would be devastating.

by Katherine Reynolds Lewis

Legions of patriotic Americans look for "made in USA" stickers before buying products, out of a desire to support the country's economy.

But what if we all were restricted to purchasing only those goods that were made in America?

Our homes would be stripped virtually bare of telephones, televisions, toasters and other electronics, and many of our favorite foods and toys would be gone, too. Say goodbye to your coffee or tea, and forget about slicing bananas into your breakfast cereal -- all three would become prohibitively expensive if we relied on only Hawaii to grow tropical crops.

Products made in USA

We'd have to trash our beloved Apple products because the iPod, iPad and MacBook aren't made in the U.S. Gasoline would double or triple in price, given that we now import more than 60% of our oil. And you couldn't propose to your true love with a diamond ring: There are no working diamond mines in the U.S.

Moreover, a complete end to imports would actually hurt the U.S. economy, because consumers and domestic companies would lose access to cheap goods. Trade protections, whether through tariffs or quotas, cost the economy roughly $2 for every $1 in additional profit for domestic producers, said Mark Perry, an economics professor at the University of Michigan-Flint and a visiting scholar at the American Enterprise Institute, a conservative think tank.

What If Justice Demands Open Borders?

Why do we cling to the myth that anyone can get in line and come to America? 
Mostly because our values demand it.

By Nathan Smith

History shows… that the West has no model of economic development to offer the still-poor countries of the world. There is no simple economic medicine that will guarantee growth, and even complicated economic surgery offers no clear prospect of relief for societies afflicted with poverty... The only policy the West could pursue that will ensure gains for at least some of the poor of the Third World is to liberalize immigration from these countries…. each extra migrant admitted to the emerald cities of the advanced world is one more person guaranteed a better material lifestyle.

—A Farewell to Alms, Gregory Clark

I don’t believe the United States of America should be in the business of separating families. That’s not right. That’s not who we are. We can do better than that.
— President Barack Obama

It was a speech the country needed to hear, yet it was full of the same old evasions.

Americans want to see themselves as a country open to immigration, a country, as in President Obama’s remarks this week, where “anyone can write the next chapter in our story,” where “what matters… is that you believe that all of us are created equal, endowed by our Creator with certain inalienable rights,” and where “in embracing America, you can become American.”

But the law states otherwise. As Obama said, “as long as current laws are on the books, it’s not just hardened felons who are subject to removal, but sometimes families who are just trying to earn a living, or bright, eager students, or decent people with the best of intentions.”

What he did not mention is that most people who apply for visas do not get them, and, anticipating this, most people who would like to come do not bother to apply. Gallup polls have found that one-quarter of the world’s population wishes to migrate, and 165 million wish to come to the United States. Only 35 million immigrants live in America. Why don’t the rest come?

Because they can’t.

“In general,” according to the State Department, “to be eligible to apply for an immigrant visa, a foreign citizen must be sponsored by a U.S. citizen relative(s), U.S. lawful permanent resident, or by a prospective employer.” Even if you have that, you are likely to be rejected, particularly those seeking employment visas, of which far fewer are available than demanded. Those without sponsorship can apply only for the diversity visas lottery, with odds of admission at just over 1 percent from Europe and Africa and under 0.5 percent from Asia.

So it’s not correct to say “anyone can write the next chapter of our story.” Only for a favored few is legal immigration an option.

To “liberals”, apostasy is the greatest sin ...

American Buffaloed.

By Mark Steyn    

Andrew Ferguson has a lively profile of the playwright David Mamet:

His fame was enough to fill the stalls of Memorial Hall at Stanford University when he came to give a talk one evening a couple of years ago. About half the audience were students. The rest were aging faculty out on a cheap date with their wives or husbands. You could identify the male profs by the wispy beards and sandals-’n’-socks footwear. The wives were in wraparound skirts and had hair shorter than their husbands’… The unease that began to ripple through the audience had less to do with the speaker’s delivery than with his speech’s content. Mamet was delivering a frontal assault on American higher education, the provider of the livelihood of nearly everyone in his audience.

Higher ed, he said, was an elaborate scheme to deprive young people of their freedom of thought. He compared four years of college to a lab experiment in which a rat is trained to pull a lever for a pellet of food. A student recites some bit of received and unexamined wisdom—“Thomas Jefferson: slave owner, adulterer, pull the lever”—and is rewarded with his pellet: a grade, a degree, and ultimately a lifelong membership in a tribe of people educated to see the world in the same way.

What happens when you decide, as Mamet did, that your membership in the tribe is no longer lifelong?

After reading The Secret Knowledge in galleys, the Fox News host and writer Greg Gutfeld invented the David Mamet Attack Countdown Clock, which “monitors the days until a once-glorified liberal artist is dismissed as an untalented buffoon.” Tick tock.

I wrote about what Mr Mamet could expect a couple of years back:

In The Village Voice the other week, the playwright David Mamet recently outed himself as a liberal apostate and revealed that he’s begun reading conservative types like Milton Friedman and Paul Johnson. If he’s wondering what he’s in for a year or two down the line, here’s how Newsweek’s Jonathan Tepperman began his review this week of another literary leftie who wandered off the reservation:

“Toward the end of The Second Plane, Martin Amis’s new book on the roots and impact of 9/11, the British novelist describes a fellow writer as ‘an oddity: his thoughts and themes are… serious — but he writes like a maniac. A talented maniac, but a maniac.’ Amis is describing Mark Steyn, a controversial anti-Islam polemicist, but he could just as well be describing another angry, Muslim-bashing firebrand: himself. Talented, yes. Serious, yes. But also, judging from the new book, a maniac.”

Poor chap. What did Martin Amis ever do to deserve being compared to me? As Mr. Tepperman concludes, the new Amis is “painful for the legion of Amis fans who still love him for novels like The Rachel Papers and his masterpiece, London Fields.”

Likewise, the new Mamet will be “painful for the legion of [Mamet] fans who still love him for [plays] like [American Buffalo] and his masterpiece, [Glengarry Glen Ross]“. And pretty soon at all those colleges the received wisdom will be either that only the early Mamet is worth reading – or that even those first works were hopelessly overrated and don’t stand the test of time. To “liberals”, apostasy is the greatest sin, and they’re serious enforcers.

How fast can a country go down the drain? Real fast

Once Upon a Time in Egypt

In 1959, Elie Moreno, then a 19-year-old sophomore engineering student at Purdue University in Indiana, visited the Egyptian port city of Alexandria on his summer vacation, and brought his camera. Moreno, an Egyptian of Sephardic Jewish descent, had been born in Alexandria and raised in Cairo. But the Egypt in which he had grown up, the milieu of the country's multi-ethnic urban elite, was fast disappearing; the summer of 1959 was the last Moreno would see of it.

The late 1950s marked the end of an era in Alexandria that had begun in the late 19th century, when the port -- then the largest on the eastern Mediterranean -- emerged as one of the world's great cosmopolitan cities. Europeans -- Greeks, Italians, Armenians, and Germans -- had gravitated to Alexandria in the mid-19th century during the boom years of the Suez Canal's construction, staying through the British invasion of the port in 1882 and the permissive rule of King Farouk in the 1930s and 1940s. Foreign visitors and Egyptians alike flocked to the city's beaches in the summers, where revealing bathing suits were as ordinary as they would be extraordinary today.

But by midcentury, King Farouk -- a lackadaisical ruler in the best of times -- had grown deeply unpopular among Egyptians and was deposed in a CIA-backed coup in 1952. Cosmopolitan Alexandria's polyglot identity -- half a dozen languages were spoken on the city's streets -- and indelible links to Egypt's colonial past were an uncomfortable fit with the pan-Arab nationalism that took root under President Gamal Abdel Nasser in the late 1950s and 1960s. "[W]hat is this city of ours?" British novelist Lawrence Durrell, who served as a press attaché in the British Embassy in Alexandria during World War II, wrote despairingly in 1957 in the first volume of The Alexandria Quartet, his tetralogy set in the city during its heyday as an expatriate haven. "In a flash my mind's eye shows me a thousand dust-tormented streets. Flies and beggars own it today -- and those who enjoy an intermediate existence between either." By the time of Hosni Mubarak's rule (and largely in response to his secularism), Egypt's second-largest city had become synonymous with devout, and deeply conservative, Islam.

The pictures from Moreno's collection, taken on the 1959 visit and several beach trips in previous years, capture the last days of an Alexandria that would be all but unrecognizable today, in which affluent young Egyptians of Arab, Sephardic, and European descent frolic in a landscape of white sand beaches, sailboats, and seaside cabanas. Two years later, in 1961, the structural steel company Moreno's father ran was nationalized by Nasser, and his family left for the United States shortly thereafter. Moreno, who went on to found a semiconductor company in Los Angeles, wouldn't visit his birthplace until he was well into middle age.

But the memories aren't all bittersweet. The woman on the far left in the above photograph, taken on Alexandria's Mediterranean coast in 1955, is Odette Tawil, whom Moreno first met in Alexandria in the summer of 1959. Reunited in the United States years later, they visited Egypt together in 1998, to get married.

Courtesy of Elie Moreno

Beachgoers on Alexandria's Stanley Beach, 1931.

How fast can a country go down the drain? Real fast.

Once Upon a Time in Afghanistan…

Record stores, Mad Men furniture, and pencil skirts -- when Kabul had rock 'n' roll, not rockets.

BY MOHAMMAD QAYOUMI 

View the photos.

On a recent trip to Afghanistan, British Defense Secretary Liam Fox drew fire for calling it "a broken 13th-century country." The most common objection was not that he was wrong, but that he was overly blunt. He's hardly the first Westerner to label Afghanistan as medieval. Former Blackwater CEO Erik Prince recently described the country as inhabited by "barbarians" with "a 1200 A.D. mentality." Many assume that's all Afghanistan has ever been -- an ungovernable land where chaos is carved into the hills. Given the images people see on TV and the headlines written about Afghanistan over the past three decades of war, many conclude the country never made it out of the Middle Ages.

A half-century ago, Afghan women pursued careers in medicine; men and women mingled casually at movie theaters and university campuses in Kabul; factories in the suburbs churned out textiles and other goods. There was a tradition of law and order, and a government capable of undertaking large national infrastructure projects, like building hydropower stations and roads, albeit with outside help. Ordinary people had a sense of hope, a belief that education could open opportunities for all, a conviction that a bright future lay ahead. All that has been destroyed by three decades of war, but it was real.But that is not the Afghanistan I remember. I grew p in Kabul in the 1950s and '60s. When I was in middle school, I remember that on one visit to a city market, I bought a photobook about the country published by Afghanistan's planning ministry. Most of the images dated from the 1950s. I had largely forgotten about that book until recently; I left Afghanistan in 1968 on a U.S.-funded scholarship to study at the American University of Beirut, and subsequently worked in the Middle East and now the United States. But recently, I decided to seek out another copy. Stirred by the fact that news portrayals of the country's history didn't mesh with my own memories, I wanted to discover the truth. Through a colleague, I received a copy of the book and recognized it as a time capsule of the Afghanistan I had once known -- perhaps a little airbrushed by government officials, but a far more realistic picture of my homeland than one often sees today.

I have since had the images in that book digitized. Remembering Afghanistan's hopeful past only makes its present misery seem more tragic. Some captions in the book are difficult to read today: "Afghanistan's racial diversity has little meaning except to an ethnologist. Ask any Afghan to identify a neighbor and he calls him only a brother." "Skilled workers like these press operators are building new standards for themselves and their country." "Hundreds of Afghan youngsters take active part in Scout programs." But it is important to know that disorder, terrorism, and violence against schools that educate girls are not inevitable. I want to show Afghanistan's youth of today how their parents and grandparents really lived.

Original caption: "Kabul University students changing classes. Enrollment has doubled in last four years."

Government 'workers' of the Americas unite

The Dreamliner nightmare

By George F. Will, 

This summer, the huge Boeing assembly plant here will begin producing 787 Dreamliners — up to three a month, priced at $185 million apiece. It will, unless the National Labor Relations Board, controlled by Democrats and encouraged by Barack Obama’s reverberating silence, gets its way.

Last month — 17 months after Boeing announced plans to build here and with the $2 billion plant nearing completion — the NLRB, collaborating with the International Association of Machinists and Aerospace Workers (IAM), charged that Boeing’s decision violated the rights of its unionized workers in Washington state, where some Dreamliners are assembled and still will be even after the plant here is operational. The NLRB has read a 76-year-old statute (the 1935 Wagner Act) perversely, disregarded almost half a century of NLRB and Supreme Court rulings, and patently misrepresented statements by Boeing officials.

South Carolina is one of 22 — so far — right-to-work states, where workers cannot be compelled to join a union. When in September 2009, Boeing’s South Carolina workers — fuselage sections of 787s already are built here — voted to end their representation by IAM, the union did not accuse Boeing of pre-vote misbehavior. Now, however, the NLRB seeks to establish the principle that moving businesses to such states from non-right-to-work states constitutes prima facie evidence of “unfair labor practices,” including intimidation and coercion of labor. This principle would be a powerful incentive for new companies to locate only in right-to-work states.

The NLRB complaint fictitiously says Boeing has decided to “remove” or “transfer” work from Washington. Actually, Boeing has so far added more than 2,000 workers in Washington, where planned production — seven 787s a month, full capacity for that facility — will not be reduced. Besides, how can locating a new plant here violate the rights of IAM members whose collective bargaining agreement with Boeing gives the company the right to locate new production facilities where it deems best?

The NLRB says that Boeing has come here “because” IAM strikes have disrupted production and “to discourage” future strikes.

Since 1995, IAM has stopped Boeing’s production in three of five labor negotiations, including a 58-day walkout in 2008 that cost the company $1.8 billion and a diminished reputation with customers.

White man's burden part II

Political Repression and Kokonut Democracies

by George B.N. Ayittey
The political situation in many African countries continues to remain distressing. The euphoria that gripped Africans as the "winds of change" swept across the continent, following the collapse of communism in Eastern Europe has largely dissipated and been replaced with a sense of disillusionment. While a few African despots were toppled, in the large majority of African nations they successfully beat back the democratic challenge. True, “elections” have been held in many African countries since 1990 to lend a veneer of ‘democracy” to authoritarian regimes. But as The Economist (23 Nov 1996) observed:
  'Boundaries, the media, the economy and the voters’ roll are all manipulated. Opponents are squashed. Soldiers have also learnt how to play the game. Half the countries of west and central Africa are ruled by “elected” ex-soldiers, among them the bosses of The Gambia and Niger, both voted into office after recently overthrowing democratically-elected governments (21).'

In some countries opposition leaders were partly to blame. Their own divisiveness, fragmentation, and lack of imagination as well as their propensity to choose ineffective tactics played right into the hands of the dictators. Out of the 54 African countries, only 14 are democratic: Benin, Botswana, Cape Verde Islands, Ghana, Madagascar, Malawi, Mali, Mauritius, Namibia, Sao Tome & Principe, Senegal, Seychelles Islands, South Africa, and Zambia. Even then, if a rigorous definition of democracy is applied, less than 5 would meet the requirements. Apart from periodic elections, they include a freely negotiated constitution, neutral and professional armed forces, an independent judiciary, an independent media and an independent central bank.

In the postcolonial period, three scenarios have emerged in the ouster of Africa's dictators. In the Doe scenario, those leaders who foolishly refused to accede to popular demands for democracy risked their own safety and the destruction of their countries: Doe of Liberia, Barre of Somalia, Mengistu of Ethiopia, and Mobutu Sese Seko of Zaire (now Congo). (Doe was killed in September 1990; Barre fled Mogadishu in a tank in January 1991; Mengistu fled to Zimbabwe in February 1991; and Mobutu fled in May 1997.) African countries where this scenario is most likely to be repeated are Algeria, Cameroon, Chad, Djibouti, Equatorial Guinea, Libya, Niger, Sierra Leone, and Tunisia. 

‘Oh my god, what have I done? What was I thinking?’

Converting Mamet

A playwright’s progress

by Andrew Ferguson   -  May 23, 2011, 

Three decades ago David Mamet became known among the culture-consuming public for writing plays with lots of dirty words. “You’re f—ing f—ed” was a typically Mamet-like line, appearing without the prim dashes back in a day when playwrights were still struggling to get anything stronger than a damn on stage. Mamet’s profanity even became a popular joke: So there’s this panhandler who approaches a distinguished looking gentleman and asks for money. The man replies pompously: “ ‘Neither a borrower nor a lender be’ —William Shakespeare.” The beggar looks at him. “ ‘F— you’ —David Mamet.” 
Some critics said his plays were pointlessly brutal. As a consequence he became famous and wealthy. It didn’t hurt when it dawned on people that many of his plays, for all the profanity and brutality, were works of great power and beauty, and often very funny to boot. When people began to say, as they increasingly did by the middle 1980s, that the author of Speed-the-Plow and American Buffalo and Lakeboat had earned a place in the top rank of the century’s dramatists, no one thought that was a joke. He took to writing for the movies (The Verdict, The Untouchables, Wag the Dog), won a Pulitzer Prize for one of his masterpieces (Glengarry Glen Ross), and moved to Holly-wood, where he became a respected and active player in the showbiz hustle.

Bad dude dictators and general coconut heads.

The Worst of the Worst

A continent away from Kyrgyzstan, Africans like myself cheered this spring as a coalition of opposition groups ousted the country's dictator, President Kurmanbek Bakiyev. "One coconut down, 39 more to harvest!" we shouted. There are at least 40 dictators around the world today, and approximately 1.9 billion people live under the grip of the 23 autocrats on this list alone. There are plenty of coconuts to go around.

The cost of all that despotism has been stultifying. Millions of lives have been lost, economies have collapsed, and whole states have failed under brutal repression. And what has made it worse is that the world is in denial. The end of the Cold War was also supposed to be the "End of History" -- when democracy swept the world and repression went the way of the dinosaurs. Instead, Freedom House reports that only 60 percent of the world's countries are democratic -- far more than the 28 percent in 1950, but still not much more than a majority. And many of those aren't real democracies at all, ruled instead by despots in disguise while the world takes their freedom for granted. As for the rest, they're just left to languish.

Although all dictators are bad in their own way, there's one insidious aspect of despotism that is most infuriating and galling to me: the disturbing frequency with which many despots, as in Kyrgyzstan, began their careers as erstwhile "freedom fighters" who were supposed to have liberated their people. Back in 2005, Bakiyev rode the crest of the so-called Tulip Revolution to oust the previous dictator. So familiar are Africans with this phenomenon that we have another saying: "We struggle very hard to remove one cockroach from power, and the next rat comes to do the same thing. Haba!" Darn!

I call these revolutionaries-turned-tyrants "crocodile liberators," joining the ranks of other fine specimens: the Swiss bank socialists who force the people to pay for economic losses while stashing personal gains abroad, the quack revolutionaries who betray the ideals that brought them to power, and the briefcase bandits who simply pillage and steal. Here's my list of the world's worst dictators. I have ranked them based on ignoble qualities of perfidy, cultural betrayal, and economic devastation. If this account of their evils makes you cringe, just imagine living under their rule.

1. KIM JONG IL of North Korea: A personality-cult-cultivating isolationist with a taste for fine French cognac, Kim has pauperized his people, allowed famine to run rampant, and thrown hundreds of thousands in prison camps (where as many as 200,000 languish today) -- all while spending his country's precious few resources on a nuclear program.
Years in power: 16

2. ROBERT MUGABE of Zimbabwe: A liberation "hero" in the struggle for independence who has since transformed himself into a murderous despot, Mugabe has arrested and tortured the opposition, squeezed his economy into astounding negative growth and billion-percent inflation, and funneled off a juicy cut for himself using currency manipulation and offshore accounts.
Years in power: 30

It's going to be very ugly before reaching equilibrium

The Arab spring unleashes Islamists on Egyptian Christians.

Screaming “With our blood and soul, we will defend you, Islam,” jihadists stormed the Virgin Mary Church in northwest Cairo last weekend. They torched the Coptic Christian house of worship, burned the nearby homes of two Copt families to the ground, attacked a residential complex, killed a dozen people, and wounded more than 200: just another day in this spontaneous democratic uprising by Muslim hearts yearning for freedom.

In the delusional vocabulary of the “Arab Spring,” this particular episode is known as a sectarian “clash.” That was the Washington Post’s take. Its headline reads “12 dead in Egypt as Christians and Muslims clash” — in the same way, one supposes, that a mugger’s fist can be said to “clash” with his victim’s face. The story goes on, in nauseating “cycle of violence” style, to describe “clashes between Muslims and Coptic Christians” that “left” 12 dead, dozens more wounded, “and a church charred” — as if it were not crystal clear who were the clashers and who were the clashees, as if the church were somehow combusted into a flaming heap without some readily identifiable actors having done the charring.

The thugs in question were Egyptian Muslims. Were they representative of all Egyptian Muslims? No, but it would be more accurate to portray them as such than to suggest, as the Pollyanna narrative holds, that Egypt (and Tunisia, and Yemen, and Syria, and Lebanon, and Algeria, and …) is teeming with legions of Gamal al-Madisons.

Amazing. Our betters are only human (or worst)

I.M.F. Head Is Arrested and Accused of Sexual Attack

By AL BAKER

The head of the International Monetary Fund, Dominique Strauss-Kahn, was taken in custody on Saturday, minutes before he was to fly to Paris from John F. Kennedy International Airport, the authorities said.

He was accused of a sex attack on a maid earlier in the day at a Times Square hotel, the authorities said.  

Mr. Strauss-Kahn, a candidate for president of France, was taken off an Air France flight by officers from the Port Authority of New York and New Jersey and turned over to Manhattan detectives, according to a Port Authority spokesman. He was expected to be taken to the offices of the Manhattan Special Victims Unit at P.S.A. 5 in Manhattan, another official said.

It was about 4:45 p.m. when plainclothes detectives of the Port Authority of New York and New Jersey suddenly boarded the plane, Air France Flight 23, as it idled on the tarmac at the airport 10 minutes before it was scheduled to take off and took Mr. Strauss-Kahn into custody, according to an agency official.

The Port Authority officers were acting on information from the New York Police Department, whose detectives had been investigating a brutal attack of a woman employee at the hotel Sofitel New York, at 45 West 44th Street, in the heart of the city’s theater district.