Monday, June 6, 2011

Could be more than meets the eye

American Banks Just Increased Their Exposure To Greek And Portuguese Banks



Chart
U.S. banks spent the fourth quarter of 2010 increasing their exposures to Portuguese and Greek banks, according to the latest report from the Bank for International Settlements.
Overall, claims on the eurozone fell by 3.5% in Q4 2010. Claims on Germany shrunk the most, and claims on Ireland fell the most among bailed out states.
But Greece and Portugal didn't see a similar decline to Ireland.
From the report:
Foreign claims on Greece and Portugal also declined during the period, although by much less than those on Ireland. Nearly half of the $10.3 billion (6.0%) fall in claims on residents of Greece was due to a $5.0 billion (5.8%) decrease in reporting banks’ foreign claims on the country’s non-bank private sector. By contrast, a $4.6 billion (9.3%) fall in foreign claims on the public sector of Portugal was the main driver of the $4.3 billion (1.9%) overall decline in foreign claims on that country.
And what country's banking sector actually increased its exposure to both Portugal and Ireland? The United States banking sector increased its claims on both Greek and Portuguese banks. Notably, Spain's banking sector also increased its claims on Portuguese banks significantly.

Animal farm

The Electric Car Albatross

by Eric Peters
Electric cars make sense at amusement parks and golf courses – and on the road, if the road is mostly flat, it’s nice and warm out (but not too warm) you’ve got money to waste, don’t have to go very far (especially in winter) ad don’t mind waiting a couple hours before you can go someplace else.
Otherwise, they’re marvelous.
The hype about electric cars is still years ahead of the actuality. If by actuality you mean an electric car that isn’t more compromised than Arnold’s political career. I remember covering the GM Impact/EV back in the early ’90s, almost 20 years ago. Most of the press swooned; a few Californians bought (well, leased) them. Some even liked them (that’s California for you and also because California doesn’t have winter; more on this below). The car was a money pit for GM, despite all the hoopla and the 
And today?
Cut through the farrago of Happy Talk and the real-world boondoggle’s still the same. The range of the latest electric cars is said to be better. But it is always couched in the ubiquitous marketing con, “up to.” And under ideal conditions.
Your actual mileage will vary.
Consider the Nissan Leaf. On a full charge, Nissan touts a a 100 mile range. It doesn’t tout what the range will fall to when it’s 16 degrees outside and the capacity of the Leaf’s battery declines by “up to” 20-30 percent, which it will as all batteries do when it is very cold out. Now add the additional load on the battery to power things like the heater/fan – and the lights, which you will probably need when it’s dark outside.
There are other forms of loading, too. Passengers and Stuff. Everyone knows that a gas powered car goes slower and burns more fuel the more it’s loaded down with passengers and cargo. The electric car is not immune from the same physical laws. Add a few hundred pounds of weight and it’s going to need more energy to do the same work and that means more draw on the battery, which will mean reduced range as well as reduced performance.
Summer’s not so hot, either – as far as optimizing an electric car’s range. You’ll probably want to run the air conditioning, which will draw power from the battery pack. And high heat can be as unkind to batteries as bitter cold.
So, let’s say the real-word range of a car like the Leaf is 60-ish miles under less-than ideal conditions. That is, in the real world. That might work for close-in commuting. But it could be an uncomfortably close shave if you live in the ‘burbs, 20 or 30 miles out.
At least with a gas-fueled car, you can refill the tank in a few minutes and be back on your way. But when the Leaf runs out of juice, you’re not only looking at an hour or more downtime to induce a partial charge (a full charge takes several hours) you’ll need to locate one of the special 220V charging stations the Leaf requires. This EV does not just plug into any household 110V outlet. The 220V stations is faster – if you can find one.
Just what our typical stressed-out commuter needs – right?
The Chevy Volt at least addresses that problem by carting around its own portable (and gas-fueled) generator, so that when your “up to 40 miles” range on electric power alone fizzles out, you’re not stuck. The car’s gas engine kicks on, pumps juice into the battery, which then runs the electric motor – and keeps you moving. (The Toyota Prius plug-in hybrid operates on the same principle.)
Which is lovely except it concedes that gas power is still better than electric power because without that gas engine, the Volt (and the Prius)ain’t a goin’ no damn where – not very damn far, anyhow.
All this would be kind of funny in a latter-day Pinto kind of way except for one thing: The government never forced the taxpaying public to underwrite Pinto ownership.
Electric cars like the Leaf and Volt come with luxury car MSRPs – until Uncle Sam transfers about 20 percent onto the backs of you and me. The Volt’s MSRP is $40,280. The Leaf’s MSRP is $32,780. What lunatic would pay BMW/Lexus money for either of these things? The answer, of course, is only a few (well-heeled) lunatics of the posturing “green” variety – posturing because by definition, if you can spend BMW/Lexus money on a new car, worrying about the cost of gas is an abstraction. People who really have to worry about spending an extra $10 or $20 at every fill-up don’t buy $32k-$40k new cars. If they do, that’s why they’re having to worry about the cost of fuel.
So, enter Uncle – who is very generous with other people’s money. “Buy” a new Volt or Leaf or one of the other electric Turduckens now available and he will send you a check for $2,500-$7,500 depending on the model. Nissan even advertises the actual cost of its car After Uncle ($32,780 less $7,500) to make the thing seem more appealing.
In summary: The prudent fellow who buys a $15k (and 41 MPG) Ford Fiesta pays full freight but the “green” poseur who buys the electric car that goes maybe 60 or 70 miles before it conks out gets a $2,500-$7,5000 handout at the expense of people like the prudent fellow who bought the $15k Fiesta on his own nickel.
Welcome to the funny farm.
ac

The Road to Serfdom

Tree pruning correctness
By Brittany Pe
uc_trees_0529
       Eddie Sales looks over some of the trimmed crape myrtles on the grounds of Albemarle Road Presbyterian Church.
Every two to three years, Eddie Sales trims and prunes the crape myrtles at his church, Albemarle Road Presbyterian Church. But this year, the city of Charlotte cited the church for improperly pruning its trees. "We always keep our trees trimmed back because you don't want to worry about them hanging down in the way," said Sales, a church member.
The church was fined $100 per branch cut for excessive pruning, bringing the violation to $4,000. "I just couldn't believe it when I heard about it," Sales said. "We trim our trees back every three years all over our property, and this is the first time we have been fined."
The fine will be dropped if the church replaces each of the improperly pruned trees, said Tom Johnson, senior urban forester for city of Charlotte Land Development Division.
"When they are nonrepairable, when they have been pruned beyond repair, we will ask them to be replaced," Johnson said. "We do that for a number of reasons but mainly because they are going to come back unhealthy and create a dangerous situation down the road."
Charlotte has had a tree ordinance since 1978, and when trees are incorrectly pruned or topped, people can be subject to fines, Johnson said.
Trees planted as a result of the ordinance are subject to the fines if they are excessively trimmed or pruned. These include trees on commercial property or street trees. They do not include a private residence. "The purpose of the tree ordinance is to protect trees," Johnson said. "Charlotte has always been known as the city of trees. When we take down trees, we need to replace these trees."
Individuals who would like to trim their trees should call the city foresters to receive a free permit to conduct the landscape work. Foresters will then meet with the person receiving the permit and give instructions on how to properly trim their trees, Johnson said.
The state Division of Forestry recommends that anyone trimming trees should be certified by the National Horticulture Board, but certification is not required to receive a permit.
On private property, fine amounts are based on the size of the tree improperly pruned. For small trees such as cherry trees or crape myrtles, the fine is $75 per tree. Excessive cutting can increase that fine to $100 per branch. For large trees such as oaks or maples, the fine is $150 per tree.
Because there is a widespread lack of understanding on how to prune crape myrtles in the Charlotte area, Johnson said, residents found in violation regarding these trees are asked to simply replace them, and the fine will be lifted.
Sales said trees found in violation at the church must be cut down and replaced with new trees by October, but the church plans to appeal. Sales doesn't know how much it would cost to replace the trees. "We trimmed back these trees in the interest of the church," Sales said. "If we were in violation, we certainly did not know we were."
Typically during the course of a year, Johnson said, about six private residents are found in violation of improper topping or pruning. "We are trying to be pro-active and not trying to fine people excessively," Johnson said.

Be prepared ... for the worst

The Scouts look to recruit more gay leaders and members
by Daily Reporter
Founding members: Chief Scout Lord Baden PowellBritain's best-known youth movement is going gay-friendly. The Scout Association has revealed plans to boost its number of gay members and leaders in a bid to banish the perception that homosexuals cannot sign up. The half-a-million strong movement has released a video as part of the campaign - which will also let Scouts attend gay pride parades in uniform.
Gay Pride: Scouts will soon be able to wear their uniforms in the paradeThe move has been praised for dragging the group into the 21st century. But some have slammed it for 'steering the organisation' away from its original Christian values.
Wayne Bulpitt, the association's UK chief commissioner, filmed a video offering support to an anti-bullying campaign led by gay rights charity Stonewall. In it he stated: 'Bullying is wrong on every level, not just for the person being bullied, but for the bully too. 'In Scouting we believe that all young people, irrespective of their sexuality, gender, race, creed or background, have an equal opportunity to develop and to be themselves.'
Scouts spokesman Simon Carter said the campaign was designed to move the group away from its reputation as being 'austere and militaristic'. He said: 'There was an assumption that being gay meant you couldn't be part of the movement. 'That was never the case and we are keen to make it clear that we accept people of any particular orientation.
'We have had youth members and adults attend Pride events and plan to do so again this year. 'It shows that we are not just taking about it but are demonstrating our support publicly.'
The association, which ended its ban on' female members in 1991, has created a series of advisory documents on gay issues for members and adult leaders. They are aimed at counselling young people about informing others about their sexuality.
It states: 'Coming out is a major decision in your life. You may decide to tell your family, a friend, your teacher or a Scout leader. 'There is nothing wrong with being gay and being a Scout and the person that you tell should be supportive and non judgemental to what you are telling them.'
Leaders are advised to treat such conversations as confidential, but to have other adults 'within hearing or sight', and to be prepared to pass on details for specialised support organisations. A second leaflet, called Gay Adults In Scouting, reassures prospective leaders and volunteers they will not be turned away on the basis of their sexuality.
Patrick Harvie, the Scottish Green leader, welcomed the move and urged the Scouts to go further and lift their ban on atheists and agnostics.
But it has also been slammed for 'diluting' the group's original Christian theme. John Cormack, of the Scottish Christian Party, said: 'My reaction to this is one of dismay and I suspect many other people will also be deeply concerned.
'Sexual morality is an area where the parents should be taking the lead, not the Scouts. This is a huge step-change away from the Christian founding ethos of the Scout movement.'

Evolution

ΜΗΔΕΝ
Δύο μεγάλα ιδεολογικά ρεύματα αναδύονται και συγκλίνουν αυτές τις μέρες στην Ελληνική κοινωνία μέσα απο το κίνημα των Αγανακτισμένων Συνεργών:
1. Το κίνημα ΜΗ μου πειράζεις τα κεκτημένα προνόμια
2. Το κίνημα ΔΕΝ πληρώνω (δις)

Is She for Real ?

The exterminator
If anyone's looking for Mitt Romney, he's under his bed and won't come out until Ann Barnhardt loses interest in him:
You don't get to be Governor of Taxachusetts by promoting conservative principles.

You want louts punished?

That makes you a 'nasty extremist' in today's Britain
by P. Hitchens
I regret to inform you that you are an extremist, bonkers, a spittle-flecked member of the lunatic fringe. 
That is because you agree with me that Wayne Bishop, whose triumphantly smirking, selfish face looks out at us from amid his terrifying brood of children, ought to be breaking rocks on Dartmoor instead, and to hell with his ‘right’ to a family life.
Bishop is a burglar. He is also a menacing lout who badly needs to learn some lessons in manners, but never will. 
We’ve all seen faces like that and learned to cross the street, or shift down the bus, to avoid them when we see them coming. 
Some people, and God help them, cannot avoid them because they live next to them.
Bishop is the sort of person the law, the police and the prisons were invented to deal with and who – in a sharp break with normal practice – was actually locked up.
As the Ministry of Injustice finally admitted last week, it is harder by far to get into prison than it is to get into university. 
Here are the figures, which should be tattooed on the foreheads of every member of the Cabinet so we are constantly reminded of how useless they all are: ‘96,710 criminals sentenced last year for more serious “indictable” offences had 15 or more previous crimes against their name. They included violent muggers, burglars and drug dealers.
‘Of those, only 36 per cent – around 34,600 offenders – were given immediate custody.’ So even after 15 or more previous offences, they won’t put most of them away. 
So it’s almost an irrelevance that Bishop has been let out of prison in the name of his Human Wrongs. It is amazing that he was inside in the first place. 
You are (for the moment) allowed to laugh at this, or to complain about it. But if, like me, you actually want to do anything about it, then you become an extremist, bonkers, spittle-flecked, lunatic etc. 

Sunday, June 5, 2011

The rule of law either applies to everyone or no one.

Why Khodorkovsky Matters



Over the past six months, I’ve written three columns about Mikhail Khodorkovsky, the former Russian oligarch who has been in prison since 2003, charged, tried, convicted — and recently reconvicted — on transparently bogus tax and embezzlement charges.
Partly, I keep returning to the subject because his lengthy imprisonment offends my sense of justice; his real crime, after all, was challenging Vladimir Putin, the Russian strongman. More importantly, Khodorkovsky’s fate stands as a powerful illustration of Russia’s biggest problem: the contempt the country’s corrupt rulers have for the rule of law.
Yet after each of those columns, I received feedback saying, essentially, that Khodorkovsky deserved what he got. Even if the crimes for which he went to prison were fictitious, he undoubtedly did bad things on his way to becoming Russia’s richest man. “He stole Russian national resources, truly the wealth of the nation,” read one e-mail, referring to Khodorkovsky’s role in founding the now-defunct oil company Yukos. “I have zero sympathy for him.”
A man named William Browder once had zero sympathy for him, too. Browder is an interesting character: the grandson of Earl Browder, a prominent, early American communist, he “rebelled,” he told me recently, not only by becoming a capitalist but by moving to Russia and setting up an investment fund. Started with $25 million, Browder’s Hermitage Fund swelled to $4.5 billion in assets by the early 2000s, making it the biggest Russia-only fund in the world.
“I always knew Russia was corrupt,” he says. “Our theory was that stocks would rise in value as Russia went from complete chaos to merely terrible chaos.”
Still, galled by the blatant theft of shareholder assets by many of the oligarchs, Browder decided to prod things along by becoming a shareholder activist. He hired investigators to root out fraud, which he then exposed in the news media. Quite often, Putin’s government, which was trying to wrest power away from the oligarchs, would step in and take corrective action. Which, of course, would cause the stocks to rise.
Khodorkovsky was one of the executives Browder tangled with over the years. As a result, says Browder, “I was happy when he was arrested.” He adds ruefully, “I didn’t understand that everything had changed.”
But it had. Khodorkovsky’s trial and sentencing forced the other oligarchs to either flee or fall in line. Suddenly, government officials were partaking in the theft instead of trying to stop it. Foolishly, Browder continued his shareholder agitation. But instead of pleasing Putin’s henchmen, his actions angered them.
In the fall of 2005, Browder, returning from London, was refused re-entry into the country. His office was raided, and documents were taken. Officials doctored the documents to fraudulently register his company under new ownership. Then they backdated contracts that made it appear as if the company owed $1 billion. But there was no way to get the $1 billion because Browder had moved Hermitage’s assets to London.
No matter. After some more fraudulent legal maneuvering, the new “owners” asked for a tax refund of $230 million. It was granted within 24 hours.
Browder had hired seven lawyers to help try to untangle the mess. One of them, Sergei Magnitsky, doggedly pursued the fraud, bringing it to the attention of other government officials, and even testified against those who had been the ringleaders. “He said we should bring complaints because it was so obviously a rogue operation,” says Browder.
In fact, there was nothing rogue about it; this was how Russia’s plutocrats now operated. Instead, Browder’s lawyers were the ones feeling the heat, and six of the seven fled Russia. Magnitsky, 36, with a young family, refused Browder’s entreaties to leave as well.
Magnitsky today is dead. He was arrested in 2008 — on “tax evasion” charges — and sent to prison. Held without so much as a hearing, his health deteriorated. In August 2009, a week before a scheduled surgery, he was transferred to a prison that lacked hospital facilities. He died three months later. This week, in a final indignity, Oleg Silchenko, the Interior Ministry official most directly responsible for Magnitsky’s detention and ongoing abuse in prison, was officially exonerated for his role in the case.
“Sergei wasn’t an oligarch,” says Browder. “He wasn't a human rights activist. He was just a guy doing his job. His mistake was having the wrong client.”
And that’s the real point, isn’t it? Khodorkovsky’s illegal jailing leads, inevitably, to Magnitsky’s death. It leads the powerful to have troublesome journalists beaten or killed with no consequences. It allows plutocrats to steal companies from shareholders, to jail whistle-blowers, to extort with impunity. The rule of law either applies to everyone or no one. You can’t carve out exceptions

Complex systems

Take down the Bad Guys

D. Boudreaux
It’s not too much of a simplification to say that modern American conservatives believe the national government to be ignorant, bumbling, and corrupt when it meddles in the U.S. economy, but sagacious, sure-footed, and righteous when it meddles in foreign-government affairs.
Nor are the boundaries of acceptable simplification breached by saying that modern American “liberals” believe the national government to be sagacious, sure-footed, and righteous when it meddles in the U.S. economy, but ignorant, bumbling, and corrupt when it meddles in foreign-government affairs.
This striking contradiction in political viewpoints has not, of course, gone unnoticed.
I was prompted to ponder this contradiction not long ago after I read an op-ed in the Washington Post by the neoconservative William Kristol calling on Uncle Sam to attempt to influence the outcomes of the recent popular uprisings in North Africa and the Middle East. My ponderings produced a hypothesis: Modern conservatives and “liberals” are obsessively fixated on bad guys (just different ones).
For both conservatives and “liberals” the world is full of problems caused by bad actors—greedy, heartless, power-hungry autocrats who deploy illegitimately acquired power to trample the rights and livelihoods of the masses. Ordinary men and women seek liberation from these tyrants, but—being ordinary and oppressed—the typical person cannot escape the overlords’ predation without help. Their liberation requires forceful intervention by well-meaning and courageous outsiders.
For “liberals” the oppressed masses consist of workers and the poor, and the oligarchs who do the oppressing are business people and private corporations. What encourages this oppression are free markets and their accompanying doctrine of nonintervention by government into the economy.
However, contrary to the “liberals,” nonintervention rests on at least three truths: First, the complexities of modern economies are so great, and hard to discern, that it is absurdly fanciful to suppose that government officials can intervene without causing more harm than good. Even the most well-meaning government is akin to a bull in a china shop: Out of its natural element, even government’s most careful actions will be so sweeping and awkward that the net result will be unintentionally destructive.
Second, even if economic intervention begins with the best of motives, it degenerates into a process of transferring wealth from the politically powerless to the politically powerful. The interventions continue to sport noble names (such as the “Great Society programs” and the “Fair Labor Standards Act”) and to be marketed as heroic efforts to defend the weak against the strong. But these, however, are nothing more than cynical and disingenuous political marketing efforts aimed at hiding from the general public the actual, unsavory consequences of these interventions.
Third, many situations that appear to well-meaning outsiders to be so undesirable that someone simply must intervene to correct them are understood by many of the people most closely affected by these situations to be superior to likely alternatives.
“Unequal income distribution” is perhaps the foremost such situation. While most “liberals” are obsessed with the “distribution” of income and believe that people of modest means must be especially disturbed by the fact that some other people earn more than they earn, in fact the typical American of modest means is far less bothered by “unequal” income “distribution” than are members of the “liberal” academy and punditry. This latter fact only further confirms to the “liberal” mind that ordinary Americans need third-party intervention to save them from their own naiveté; ordinary Americans just don’t know what glories they are denying themselves by acquiescing in the prevailing economic power structure.
Modern “liberals” dismiss these three objections to economic intervention as being fanciful excuses used by the economically powerful—and, even worse, also by the economically naive free-market faithful—to provide (flimsy) intellectual cover for predations by capitalist bad guys. The realistic assessments by modern “liberals” indicate to them that economic intervention is necessary and righteous.
A nearly identical debate plays out on the foreign-policy front, but with the sides switched.
For modern American conservatives the oppressed masses consist of foreign peoples yearning for American-style freedom and political franchise. But these unfortunate foreigners are oppressed by oligarchs who happen to control their governments. “Liberals” (and liberals) who adhere to a doctrine of U.S. government nonintervention in foreign affairs raise the same three objections that conservatives (and liberals) raise against government intervention in the economy.
First, the complexities of foreign governments’ relationships with their citizens are so great and hard to discern that it is absurdly fanciful to suppose that Uncle Sam can intervene without causing more harm than good. Even the most well-meaning intervention is akin to a bull in a china shop: Out of its natural element, even Uncle Sam’s most careful actions will be so sweeping and awkward that the net result will be unintentionally destructive.
Second, even if foreign intervention begins with the best of motives, it degenerates into a process of transferring wealth from the politically powerless to the politically powerful. The interventions continue to enjoy noble names (such as “Operation Iraqi Freedom”) and to be marketed as heroic efforts to defend the weak against the strong. But these, however, are nothing more than cynical and disingenuous political marketing efforts aimed at hiding from the general public the actual, unsavory consequences of these interventions in which corporations such as Halliburton and Blackwater rake in huge, undeserved profits at the expense of the American taxpayer and the foreign populations ostensibly being helped.
Third, many situations that appear to well-meaning outsiders to be so undesirable that someone simply must intervene are understood by many of the people most closely affected by these situations to be superior to likely alternatives. As oppressive as Saddam Hussein’s Iraqi regime genuinely was, it’s not at all clear that merely disposing of this particular bad guy has liberated Iraqis from oppression. Saddam’s rule was very much a result—and certainly not the principal cause—of Iraq’s anti-liberal culture and dysfunctional social institutions, not to mention earlier U.S. intervention.
Foreign countries’ political, economic, and social institutions are too complex and too deeply rooted in unique histories to be adequately grasped by American politicians and military leaders. Therefore American intervention—which is inevitably ham-fisted—adds to this mix only confusion and turmoil.
The two kinds of intervention situations aren’t analogous in all details; differences exist. But these differences are small when compared to the similarities. “Liberals’” confidence that domestic markets can be improved by battalions of bureaucrats charged with keeping bad guys in line is surprisingly similar to conservatives’ confidence that the welfare of foreigners can be improved by battalions of U.S. military troops charged with keeping bad guys in line.

A guide against Greek obesity

Northern Exposure

by David R. Henderson
Imagine this scenario: a federal government runs a large deficit. The deficits are so large, in fact, that the ratio of federal debt to Gross Domestic Product approaches 70 percent. Meanwhile, voters have gotten used to large federal spending programs. Does that sound like the United States?
Well, yes. But it also describes Canada in 1993. Yet, just 16 years later, Canada’s federal debt has fallen from almost 70 percent to only 29 percent of GDP. Moreover, every year between 1997 and 2008, Canada’s federal government had a budget surplus. In one fiscal year, 2000-2001, its surplus was a whopping 1.8 percent of GDP. If the U.S. government had such a surplus today, that would amount to a cool $263 billion rather than the current deficit of over $1.5 trillion.
Canada’s budget triumph
How did the Canadian government manage such a turnaround? Since Canada is, to an extent, a more-socialist and higher-taxed country than the United States, you might expect its government to have relied on tax increases—but it didn’t. About 85 cents of every dollar of deficit reduction was achieved with spending cuts. Beyond that, the government didn’t pull every politician’s favorite trick of cutting just the growth rate of government spending. It cut absolute spending on many programs in dollar terms. And because the inflation rate, though low, was greater than zero, these cuts in dollar terms were even larger in inflation-adjusted dollars.
Because of the years of spending cuts, federal spending on programs—that is, all spending except for interest on the federal debt—fell from a high of 17.5 percent of GDP in 1992-93 to 11.3 percent in 2000-01. Prominent Canadian economist Thomas Courchene noted correctly that this was the lowest percent " in more than half a century."
There are two morals to this story for the United States. First, the deficit can be tamed with ten years of fiscal discipline, mainly on the side of spending cuts. The U.S. does not have to accept the idea that there are only two grim choices: living with huge deficits and a federal debt that is getting ever greater as a percent of GDP or accepting our current spending but reducing the deficit with major tax increases.
The second moral is that the Canadian experience does not support the Keynesian view that one should not cut government spending during an economic slowdown. The Canadian experience, just like the U.S. experience during the 1920-21 recession and in the first two years after World War II ended, shows that cutting spending even during low-growth years is good for long-term economic results.
Canada’s federal debt has fallen from almost 70 percent to only 29 percent of GDP.
We often hear that cutting government budgets causes "pain." Whether and to what extent that’s true, though, depends on what is cut. By selling off its air traffic control system to a private non-profit company called NAV Canada, the Canadian government netted $1.4 billion and saved $200 million in annual subsidies. A big benefit beyond these savings is that NAV Canada has revolutionized air traffic control in Canada, putting the country decades ahead of United States in air traffic control.

If not now, when?

Exiting the Euro Crisis

                                Are the currency’s days numbered?
What do economics and history have to tell us about the ways euro zone countries are likely to resolve their problems of fiscal unsustainability and banking system insolvency? In answering that question, I am among the most pessimistic observers of the likely future of the euro and its membership. In my view, the euro zone’s likely failure to avoid at least some departures, if not total collapse, reflects its poor initial institutional design. Countries were joined together that were unlikely to be able to survive as a common currency zone, and there were no credible institutions in place to enforce long-term fiscal discipline or to coordinate the resolution of exigencies.
Why doesn’t everyone share my view? I think their relative optimism can be traced to differences in worldview. My worldview is that of a non-European economist and historian. Here is why that worldview leads to pessimism.

Arithmetic Trumps Legalism
As an economist, I place more stock in arithmetic than in the legalities of what countries supposedly are or are not permitted to do; legislation or politicians’ pronouncements about the impossibility of a departure from the euro zone counts for little if the math ultimately requires it. I will argue that in the case of at least one country—Greece—the fiscal arithmetic strongly favors not only a sovereign debt restructuring but also a departure from the euro zone, and there may be others for whom this same outcome will soon become a necessity as well.
Real Exchange Rate Theory and Political Economy
Since before the establishment of the euro, American economists have had a distinctly more pessimistic view of the euro experiment than have their European colleagues.
Two years ago, distinguished European economists Lars Jonung and Eoin Drea published a detailed and quite humorous review of the differences in opinion about the euro between American and European economists. Its title characterized what it (then) regarded as the excessive pessimism of the Americans: "The Euro: It Can’t Happen, It’s a Bad Idea, It Won’t Last. U.S. Economists on the EMU, 1989-2002." In fact, my own 1999 paper predicting the eventual collapse of the euro was included in that review. The implicit theory behind the Jonung and Drea paper was that American economists (perhaps out of jealousy or nationalism) did not want to believe that the euro would work. In light of recent events, an alternative theory may have greater weight: Europeans were in denial.
As early as 1999, in an essay for the Cato Institute titled "The Impending Collapse of the European Monetary Union," I predicted that roughly a decade after its creation, either some members of the euro zone would be forced to leave, or the currency would depreciate dramatically as a means of keeping those countries in the euro zone. In particular, I predicted that southern European countries would become fiscally unsustainable, and that losses of European banks would create significant bank insolvencies, which would put further fiscal pressure on governments through the costs of bank bailouts.

Force majeure

Murder Most Academic
A British Ph.D. candidate puts “homicide studies” into practice.
By Theodore Dalrymple
I
n some modern societies—and certainly Britain is one of them—satire is prophecy. This makes effective satire difficult because reality so soon catches up with it. Satire is also dangerous and perhaps even irresponsible, for no idea is too absurd, it seems, for our political masters and bureaucratic elite to take seriously and put into practice—at public expense, of course, never their own.

Sometimes reality is far in advance of satire when it comes to absurdity. The results, however, are not always funny. If a satirist had come up with the idea of a violent criminal who had spent time in an asylum being admitted by a university to its doctoral program in “homicide studies,” thereafter turning into a serial killer, that satirist would have been denounced for poor taste. But this is precisely what a British university did recently. A man with a long history of criminal violence became a serial killer while working on a Ph.D. thesis at the University of Bradford, the subject of his thesis being the methods of homicide used in the city during the nineteenth century. He himself used methods more reminiscent of the fourteenth.
Stephen Griffiths is 40. He has never worked and has always lived at taxpayers’ expense. At 17, he was sentenced to three years’ imprisonment for cutting the throat (not fatally) of a supermarket security guard who tried to arrest him for shoplifting. In prison, doctors reported, Griffiths had a “preoccupation with murder—particularly multiple murder.” They diagnosed him as a violent psychopath; that is, he had an intractable personality development that made him likely to commit new violent offenses.
The doctors were right. Shortly after his release from prison, Griffiths committed more violent acts, including holding a knife to a woman’s throat, and wound up imprisoned once more. He was then sent from prison to Rampton, a high-security mental hospital; but again, the doctors diagnosed him as a psychopath for whom they could do nothing, and after two months they returned him to prison, from which he was soon—much too soon, as it turned out—released.
He remained violent toward women. He managed to convince a jury that he was innocent of the charge of pouring boiling water on, and badly burning, a sleeping girlfriend who had decided to leave him. Other girlfriends went to the police but were too terrified to testify in court, knowing that he would receive a short sentence at most. One girlfriend—whose legs he had cut with broken glass, whose nose he had broken, and whom he had knocked out—later told a reporter that he would attack her if she so much as looked at another man. When she left him, he hunted her down (despite court orders to stay away from her), slashed the tires of her car, and daubed the wall outside her apartment with the word “slag.” He was convicted of harassment in 2009.
Such was the man whom the University of Bradford selected to pursue a doctorate in homicide studies, a subdivision of the Department of Criminal Justice Studies, with fees and living expenses paid by the government. Though computer checks on the criminal records of prospective employees are now routine in Britain, and medical students are checked, applicants for doctorates in homicide studies apparently are not; or if they are, no notice is taken of what is found. Griffiths did not hide his propensities with any great cunning; why should he have bothered, in these nonjudgmental times of peace and tolerance toward all men? He kept hundreds of books about serial killers in his apartment, disclosed to his psychiatrists his intention to become a serial killer, and told girlfriends that he skinned and ate rats alive, adding that his ambition was to become even more notorious than the Yorkshire Ripper, a man who had killed 13 women in the 1970s. Nor did Griffiths hesitate to proclaim his oddity to the public; he used to take his pet lizards, which he also fed with live rats, for walks on a leash.
In 2009 and 2010, while pursuing his doctorate in the program, Griffiths killed and ate three women, two cooked and one raw, according to his own account. He later told the police that he had killed other women.
He committed his last murder in front of closed-circuit video cameras installed in his apartment building. According to the building’s superintendent, who saw the video and called the police, the victim, Suzanne Blamires, ran from Griffiths’s apartment with Griffiths, wielding a crossbow, in pursuit. She fell or was pushed, and he fired a bolt into her. Fully aware, even triumphant, that he was being recorded, Griffiths extended his finger to the camera and then dragged the lifeless body by the leg back into his apartment. There, he later claimed, he ate some of her. When asked for his name in court after his arrest, he identified himself as the “Crossbow Cannibal.” That reply alone assured him the notoriety that he had made no secret of craving. He was convicted of the three murders this past December and received a life sentence. Early reports suggest that Griffiths may be permitted to complete his doctorate—still at public expense, of course—while in prison.
His three known victims were prostitutes, as is often the case with such killers (a truck driver in the town of Ipswich, one Steven Wright, was convicted in 2008 of murdering five). This is said to indicate a hatred of women caused by sexual difficulties with them; psychologists will no doubt be interested in the fact that Griffiths hated his mother, who separated from his father when Griffiths was young and was reputed by neighbors to be a prostitute herself. Certainly she behaved in a sexually uninhibited way: she would go naked into the yard of their house in the town of Wakefield and have sex with a variety of men in full view of the neighbors. But the relation between early life and subsequent conduct is never fixed; many men have had mothers as irresponsible as Griffiths’s without becoming serial killers. Indeed, he himself had a younger brother who did not, and there is therefore always something incalculable about human conduct.
Nevertheless, there are certain regularities, and one of them is the way in which the victims of men such as Griffiths are described in the Guardian, the house journal of the British intelligentsia and its bureaucratic hangers-on. This is important because it illustrates the way in which a dominant elite—dominant de facto if not always de jure—thinks about social problems.
An article describing the victims of Wright, the Ipswich murderer, was titled the women put into harm’s way by drugs. A similar article about Griffiths’s victims was headed “crossbow cannibal” victims’ drug habits made them vulnerable to violence. In other words, these women became prostitutes by force majeure, on the streets not because of choices they had made but because of chemical substances that controlled them without any conscious intervention on their part—no more than if, say, an abyss caused by an earthquake had suddenly opened up and swallowed them.
Now either we are all like this—no different from inanimate objects, which act and react mechanically, as Descartes supposed that dogs and cats did—or we are not. The view that we are brings with it certain difficulties. No one could live as if it were true; no one thinks of himself, or of those about him, as automatons; we are all faced with the need to make conscious decisions, to weigh alternatives in our minds, every waking hour of every day. Human life would be impossible, literally inconceivable, without consciousness and conscious decision making. It is true that certain medical conditions, such as temporal-lobe epilepsy during fits, deprive people of normal consciousness and that they nevertheless continue to behave in a recognizably human way; but if all, or even most, of humanity suffered from those conditions, human life would soon be at an end.
Assuming, then, that not everyone is driven to what he does by his own equivalent of drug addiction, the Guardian must assume that Wright’s and Griffiths’s victims were fundamentally different from you and me. Unlike us, they were not responsible for their actions; they did not make choices; they were not human in the fullest sense. Not only is this a view unlikely to find much favor with women who resemble the victims in some way; it also has potentially the most illiberal consequences. For it would justify us, the full human beings, in depriving such women of liberty. If “their hopeless addiction to heroin, alcohol or crack cocaine led them to sell their bodies in the red light district on the edge of Bradford city centre and made them vulnerable to violence,” as the article tells us, surely we should force our help on them to recover their full humanity, or, if that proves impossible, take them into preventive detention to protect them. They are the sheep, we the shepherds.