The Beautiful City

Beauty emerges from paradox

by TROY CAMPLIN

What makes a city beautiful? It’s not its parks and architecture, decorative though they may be. It’s not the mannequins dressed in high fashion, or the creative window displays. A city’s beauty comes from its life, from how its structures keep people teeming on the sidewalks and arterials—pulsing like blood through a body. A city’s beauty comes about the same way all beauty comes about in nature: through the unity of apparently opposing phenomena.

“Neighborhood accommodations for fixed, bodiless, statistical people are accommodations for instability,” wrote the great observer of cities, Jane Jacobs. In order for a neighborhood to have staying power, Jacobs thought, the people in it must constantly change. A city only becomes stable through “a seeming paradox.” That is, to get a critical mass of people to stay put, a city has to have “fluidity and mobility of use.” And so the neighborhood itself must change and reorganize itself in order to keep its people there. Fixedness and change. Healthy cities exemplify such paradoxes.

Cities are also products of attraction and repulsion. These forces somehow find balance. Identical businesses may repel each other, but similar businesses can attract each other. You won’t typically find two hair salons next to each other, for example, but it’s not uncommon to find a nail salon, a shoe store, and a clothing store in proximity. Why do fast food restaurants attract each other? And why do malls seem to keep their distance? A glance at any online map will show the shopping malls in an area to be roughly the same distance apart—close enough to each other to reduce transportation costs, far enough away to reduce competition. The presence of a mall, in turn, attracts more shopping and more restaurants nearby. These forces of attraction and repulsion work together to create a city’s textures, its amenities, and its strange centers of activity. 

Another apparent contradiction Jacobs finds in cities lies in their ability to reconcile the dweller’s desire for both the private and the social: “A good city street neighborhood achieves a marvel between its people’s determination to have essential privacy and their simultaneous wishes for differing degrees of contact, enjoyment or help from the people around.”

These public places foster weaker social bonds and, thus, create the conditions for a public life. Weak bonds are the social forces created by private citizens who shuffle and cluster on the neighborhood street. It’s the morning nod to the Bangladeshi man who minds his newsstand each day. It’s thirty seconds of sports banter with the doorman at work. We end up being far more social when our weak bonds dominate our more clannish instincts—such as the bonds that hold together street gangs or let whole nations tolerate ethnic cleansing. Of course family and friendship bonds are strong, but it’s not clear it’s healthy to extend these to the wider society. Because we ultimately choose our bonds, a healthy mix of weak and strong bonds will originate in all the choices cities can provide. And such bonds will change with one’s needs.

Our Legacy Systems - Dysfunctional, Unreformable

America's legacy systems are like stars about to go super-nova

by Charles Hugh-Smith

There are two problems with the vast, sprawling legacy systems we've inherited from the past: they're dysfunctional and cannot be fixed/reformed. The list of dysfunctional legacy systems that cannot be truly reformed is long: Social Security, with its illusory Trust Funds and unsustainable one-to-two ratio of beneficiaries to full-time workers; Medicare, 40% fraud and ineffective/needless care; the healthcare system (if you dare even call the mess a system), 40% paper shuffling and 25% defensive medicine and profiteering; weapons procurement--the system works great if you like cost overruns and programs that take decades to actually produce a weapon; higher education--costs have skyrocketed 700% while studies (Academically Adrift) have found that fully a third of all college graduates learned little of value in their four years; the financial system--now that we've given the Federal Reserve oversight over Too Big To Fail Bank practices, do you really think we'll ever get rid of TBTF banks?

One place to start an investigation of any legacy system is to ask: how would we design a replacement system from scratch? The gulf between a practical, efficient replacement system and the broken legacy system is a measure of the legacy system's dysfunction.

We all know why legacy systems cannot be reformed or replaced: each has a veritable army of constituents and vested interests. Every single person drawing a check or payment from the legacy system fears reform of any kind, as each fears that their place at the feeding trough might be threatened.

As a result, reform is necessarily superficial, a simulacrum of real reform that satisfies the PR need to "fix the system" but actually hardens the system against future reform by adding layers of complexity that act as defensive complexity moats.

There is a fundamental asymmetry between those threatened by reform and the reformers. The reformers are trying to save the system from eventual collapse, but the benefits of their efforts often fall to the cohort of young people who have not yet become voters or entered the workforce; these citizens don't exist politically.

Meanwhile, those drawing paychecks, benefits or payments from the legacy system will fight with every fiber of their being to protect every cent of "their fair share." (Needless to say, every share is fair and deserved.) Those resisting reform are fighting to the death, so to speak, while the reformers have no equivalent motivation or political persuasion.

The Descent of Hungary

The goulash democracy

By RAYMOND ZHONG

How much can the European Union, by law a club of democracies, actually do to stop a freely elected government within its borders from turning its democracy into an autocracy?

This week the Venice Commission, the European Council's advisory body on constitutional matters, issued a stinging report on recent judiciary reforms passed by Hungary's ruling Fidesz party, which the group says are antidemocratic and jeopardize the right to fair trial. The European Commission is in talks with Budapest for this and other potential violations of EU law. Last month the European Parliament broached procedures that could effectively kick Hungary out of the EU.

All signs indicate that compromises will eventually be reached. This is not a fight that either side wants to see end messily. Yet European institutions can only do so much to reverse the ugly turn that public life has taken here on Budapest's splendid stone boulevards, and in its houses of power.

***

The scale and speed of what has happened in Hungary since 2010 took even old Budapest hands by surprise. In April of that year, Fidesz and its coalition partner won a two-thirds majority in Parliament following eight years of incompetent, scandal-plagued rule by the Socialist Party. Fidesz chief Viktor Orban took office as prime minister with, he declared, a broad mandate for change.

In its first 20 months in office, Mr. Orban's government restructured public administration in almost every aspect of Hungarian life. Among the 363 new laws Fidesz passed between May 2010 and December 2011—about one new law for every two working days—were reforms of the courts, the central bank and media regulation. There was a new constitution. There was a new electoral map that favored Fidesz candidates, and a reduction in the number of MPs. There were new laws governing taxation, health care, churches, universities, even the tobacco trade and the State Opera—all with the effect of bringing power closer to the center and placing Fidesz appointees in key posts.

During the Cold War, Hungary was said to be governed by "goulash communism" due to Janos Kadar's experiments in free-market economics and gradual loosening of his totalitarian rule. Today we are witnessing the birth of goulash democracy: parliamentary government spiced with strong centralized control and elements of single-party rule.

None of this might have mattered so much to crisis-addled Europe, however, but for the failure of Mr. Orban's economic program. Imposing Europe's highest tax on banks and windfall levies on sectors dominated by multinational firms has done no miracles for foreign investment and growth, or for confidence in Budapest's solvency.

How the Left came to reject cheap energy for the poor

Any effort worthy of being called progressive, liberal, or environmental, must embrace a high-energy planet

by Michael Shellenberger and Ted Nordhaus

Eighty years ago, the Tennessee Valley region was like many poor rural communities in tropical regions today. The best forests had been cut down to use as fuel for wood stoves. Soils were being rapidly depleted of nutrients, resulting in falling yields and a desperate search for new croplands. Poor farmers were plagued by malaria and had inadequate medical care. Few had indoor plumbing and even fewer had electricity.

Hope came in the form of World War I. Congress authorized the construction of the Wilson dam on the Tennessee River to power an ammunition factory. But the war ended shortly after the project was completed.

Henry Ford declared he would invest millions of dollars, employ one million men, and build a city 75 miles long in the region if the government would only give him the whole complex for $5 million. Though taxpayers had already sunk more than $40 million into the project, President Harding and Congress, believing the government should not be in the business of economic development, were inclined to accept.

George Norris, a progressive senator, attacked the deal and proposed instead that it become a public power utility. Though he was from Nebraska, he was on the agriculture committee and regularly visited the Tennessee Valley. Staying in the unlit shacks of its poor residents, he became sympathetic to their situation. Knowing that Ford was looking to produce electricity and fertilizer that were profitable, not cheap, Norris believed Ford would behave as a monopolist. If approved, Norris warned, the project would be the worst real estate deal “since Adam and Eve lost title to the Garden of Eden.” Three years later Norris had defeated Ford in the realms of public opinion and in Congress.

Over the next 10 years, Norris mobilized the progressive movement to support his sweeping vision of agricultural modernization by the federal government. In 1933 Congress and President Roosevelt authorized the creation of the Tennessee Valley Authority. It mobilized thousands of unemployed men to build hydroelectric dams, produce fertilizer, and lay down irrigation systems. Sensitive to local knowledge, government workers acted as community organizers, empowering local farmers to lead the efforts to improve agricultural techniques and plant trees.

Is Italy Ungovernable?

Broken from Birth

By RAYMOND ZHONG

Silvio Berlusconi seemed exceptionally pleased with himself right up until his last days in office. As Rome's cost of funds climbed early this month, Italy's prime minister maintained that his government's finances were shipshape and that the Italian economy was in fine health. "The restaurants are full and the planes fully booked," he told the G-20 summit in Cannes. Only after Mr. Berlusconi finally lost his parliamentary majority on Nov. 8 did his grin give way to a grimace and his gleaming perma-tan start to look a bit pale.

Did the Berlusconi era have to end this way, 17 years after il Cavaliere was first elected? Perhaps not, David Gilmour says. The historian and author is just surprised the end didn't come sooner.

"It should have ended long ago. It should have ended inside Italy, for Italian reasons. I think in no other country in Western Europe, or the States, would he have survived so long. He would never have survived so long, let alone been elected by an overwhelming majority in three elections."

Mr. Gilmour's latest book, "The Pursuit of Italy," is a wide-ranging ramble through Italian history, a tour in chronological order but with frequent digressions. It was meant to be a much shorter book, Mr. Gilmour says, one focusing on the 19th and 20th centuries. But his editors kept pushing him to follow the threads farther and farther back. "Go back to the Romans, David. Go back to Cicero."

Cicero, in Mr. Gilmour's telling, turns out to have plenty to say about Italy today, but the real cornerstone of modern Italy's woes is nevertheless more recent. According to Mr. Gilmour, the "Italian reasons" for which Mr. Berlusconi ought to have fallen have to do with the country's strong regional divisions, which perpetually fracture national politics and create weak institutions. Unifying the country, therefore, has cost it immeasurably. Seated before a log fire in his study, in a converted cottage deep in the plains of Oxfordshire, Mr. Gilmour explains.

In 1860, a sailor and radical named Giuseppe Garibaldi led a band of soldiers down the Italian peninsula and defeated the armies of Sicily and Naples in the name of the Sardinian King Victor Emmanuel II. Garibaldi had failed in his designs to unite the Italian kingdoms twice before, and he spent years in exile overseas before returning to the island of Caprera, near Sardinia, in 1854.

The third time was the charm. On March 17, 1861, Victor Emmanuel was declared the head of state of a new country called "Italy." But whether any of the peninsula's residents wanted to be "Italians" was uncertain from the start. "The South wasn't united," Mr. Gilmour says. "It was conquered."

Breaking Bad (Habits)

Better now than later

by Stephen Roach

It was never going to be easy, but central banks in the world’s two largest economies – the United States and China – finally appear to be embarking on a path to policy normalization. Addicted to an open-ended strain of über monetary accommodation that was established in the depths of the Great Crisis of 2008-2009, financial markets are now gasping for breath. Ironically, because the traction of unconventional policies has always been limited, the fallout on real economies is likely to be muted.

The Federal Reserve and the People’s Bank of China are on the same path, but for very different reasons. For Fed Chairman Ben Bernanke and his colleagues, there seems to be a growing sense that the economic emergency has passed, implying that extraordinary action – namely, a zero-interest-rate policy and a near-quadrupling of its balance sheet – is no longer appropriate. Conversely, the PBOC is engaged in a more pre-emptive strike – attempting to ensure stability by reducing the excess leverage that has long underpinned the real side of an increasingly credit-dependent Chinese economy.

Both actions are correct and long overdue. While the Fed’s first round of quantitative easing helped to end the financial-market turmoil that occurred in the depths of the recent crisis, two subsequent rounds – including the current, open-ended QE3 – have done little to alleviate the lingering pressure on over-extended American consumers. Indeed, household-sector debt is still in excess of 110% of disposable personal income and the personal saving rate remains below 3%, averages that compare unfavorably with the 75% and 7.9% norms that prevailed, respectively, in the final three decades of the twentieth century.

With American consumers responding by hunkering down as never before, inflation-adjusted consumer demand has remained stuck on an anemic 0.9% annualized growth trajectory since early 2008, keeping the US economy mired in a decidedly subpar recovery. Unable to facilitate balance-sheet repair or stimulate real economic activity, QE has, instead, become a dangerous source of instability in global financial markets.

With the drip-feed of QE-induced liquidity now at risk, the recent spasms in financial markets leave little doubt about the growing dangers of speculative excesses that had been building. Fortunately, the Fed is finally facing up to the downside of its grandiose experiment.

The Demographic Blues

Now the big bad wolf is coming to the door, and those who built their homes of straw and sticks face trying times

by WALTER RUSSELL MEAD

Back in the late 1960s, when I was a callow youth with no common sense to speak of and a huge, misshapen ego, the Big Scare energizing the United Nations, the foundation world, the leaders of civil society and the intellectual establishment of the day was the Population Bomb. It’s hard for young people today to understand how terrified, urgent, self righteous and utterly convinced the Population Bomb movement was. The closest analogy today is the global green movement and its apocalyptic warnings about climate change. The Population Bomb worriers didn’t have as many grassroots organizations in support of their agenda as the greens do today, but the establishment, the mainstream press, and the great and the good were even more worried about the Bomb then than they are about global warming today, and the forecasts we were getting were even more dire.

Basically, the problem was that people were having too many children—especially, though it wasn’t polite to say this, non-white and non-educated people. All over the developing world, modern medicine was reducing infant mortality, but people were having just as many children as they did back in the days when half of all babies died in their first two years of life. With life expectancy increasing for older people as well, the world’s population was exploding, and the inevitable result would be famine, war and you name it.

The most visible spokesperson for the alarmists was Paul Ehrlich, a Stanford biologist whose 1968 book The Population Bombpredicted inevitable mass famines and other unspeakable horrors starting in the 1970s and accelerating to Armageddon as the starving billions fought over crusts and war boiled across an emaciated world. As the professor warned us in exactly the same kind of prose alarmist greens now use,

 “The battle to feed all of humanity is over. In the 1970s hundreds of millions of people will starve to death in spite of any crash programs embarked upon now. At this late date nothing can prevent a substantial increase in the world death rate…”

One of the chief villains of the movement to defuse the Population Bomb was Pope Paul VI; his encyclical condemning birth control among Catholics was considered an act of mass murder. After all, with the world’s population heading inevitably and inexorably off the cliff into unspeakable disaster, for the Roman Pontiff to ban one of the few possible methods of saving the planet was horrible beyond all thought.

The bomb was a dud. Though Dr. Ehrlich went on to peddle other scare stories about Malthusian meltdowns of various kinds for almost half a century after the world failed to collapse, his reputation has never been the same. The decades since the great population hysteria have seen a steady decline in the rate of population growth to the point where in many countries the biggest worry now is population decline. The number of people without secure access to an adequate diet is falling; the 21^stcentury currently looks set to spend more time worrying about obesity than starvation.  While the world population continues to rise, most experts now believe (for what it’s worth) that the world population will level off rather than explode.

Crisis in Egypt - More worrying than ever

A sense of foreboding is rising across an increasingly troubled land

IT IS an odd thing when a nation of 84m people lumbers towards a precise appointment with a wholly unknown destiny. But such is the case with Egypt. The fatal date is June 30th, the first anniversary of Muhammad Morsi’s inauguration as Egypt’s first freely elected president. The event is a planned nationwide protest, calling for Mr Morsi to go, in the manner of Egypt’s dictator of 30 years, Hosni Mubarak, only 30 turbulent months ago.

No one knows if the protests will succeed, nor what might happen if they do. What is sure is that they will be big and very possibly bloody. The country is polarised, the mood highly charged. Already skirmishes in provincial cities between friends and foes of Mr Morsi’s party, a creation of the Muslim Brotherhood, have left a handful of dead and scores of injured.

Many expect clashes to worsen and spread before a showdown on June 30th. The army has already deployed across the country to secure key installations and has reinforced the gates of Mr Morsi’s palace with concrete barriers. Worried citizens are stockpiling necessities, with a panicked run on petrol causing mile-long queues and snarled traffic. Embassies caution their citizens to avoid likely trouble spots.

With a mix of error and mischance, Mr Morsi has managed to anger every tier of Egypt’s class-ridden society. For those concerned mostly with money, whether rich or poor, his government’s glaring failure to stem a dire economic slide counts most. Inflation, unemployment, government debt and poverty have all swollen markedly during Mr Morsi’s short tenure. Shortages of fuel and power are now chronic.

For those concerned more with politics, whether from an Islamist or secular point of view, the Muslim Brotherhood’s secretive and bullying style has proved deeply frustrating. Many on the religious right accuse Mr Morsi of using religion simply to secure power, not to make Egypt more Islamic. Non-Islamists accuse the Brothers of attempting a creeping takeover of state institutions, as well as of rank incompetence. “It’s not a question of whether they are Muslim Brothers or liberals,” wrote Mohamed ElBaradei, a prominent opposition figurehead, in a recent scathing article. “They are simply not qualified to govern.”

'You Can't Eat Sharia'

Egypt is on the brink -- not of something better than the old Mubarak dictatorship, but of something even worse

BY MOHAMED ELBARADEI

Two years after the revolution that toppled a dictator, Egypt is already a failed state. According to the Failed States Index, in the year before the uprising we ranked No. 45. After Hosni Mubarak fell, we worsened to 31st. I haven't checked recently -- I don't want to get more depressed. But the evidence is all around us.

Today you see an erosion of state authority in Egypt. The state is supposed to provide security and justice; that's the most basic form of statehood. But law and order is disintegrating. In 2012, murders were up 130 percent, robberies 350 percent, and kidnappings 145 percent, according to the Interior Ministry. You see people being lynched in public, while others take pictures of the scene. Mind you, this is the 21st century -- not the French Revolution!

The feeling right now is that there is no state authority to enforce law and order, and therefore everybody thinks that everything is permissible. And that, of course, creates a lot of fear and anxiety.

You can't expect Egypt to have a normal economic life under such circumstances. People are very worried. People who have money are not investing -- neither Egyptians nor foreigners. In a situation where law and order is spotty and you don't see institutions performing their duties, when you don't know what will happen tomorrow, obviously you hold back. As a result, Egypt's foreign reserves have been depleted, the budget deficit will be 12 percent this year, and the pound is being devalued. Roughly a quarter of our youth wake up in the morning and have no jobs to go to. In every area, the economic fundamentals are not there.

Egypt could risk a default on its foreign debt over the next few months, and the government is desperately trying to get a credit line from here and there -- but that's not how to get the economy back to work. You need foreign investment, you need sound economic policies, you need functioning institutions, and you need skilled labor.

Meet the Gangs and Vigilantes Who Thrive Under Morsi

The Egyptian State Unravels

An anti-Morsi protester holds a homemade gun in Cairo

By Mara Revkin

“Everybody needs a weapon,” said Mahmoud, a 23-year-old Egyptian arms dealer, as he displayed his inventory of pistols, machetes, and switchblades on the living room floor of his family’s apartment in the crime-ridden Cairo neighborhood of Ain Shams.

With Egyptian government statistics indicating a 300 percent [1] increase in homicides and a 12-fold increase in armed robberies since the 2011 revolution, Mahmoud and other black-market entrepreneurs are capitalizing on a growing obsession with self-defense and civilian vigilantism among Egyptians who have lost patience with their government’s inability to restore security. Frustration with lawlessness is among the numerous grievances that will drive antigovernment protesters to the streets on June 30, the one-year anniversary of President Mohamed Morsi’s inauguration.

Mahmoud is one of many post-revolutionary lawbreakers who were victims of crime before they became perpetrators. When I asked him how he made the decision to start selling black-market weapons, he replied sarcastically, “What decision? I had no choice.” Over lukewarm Pepsi served by his mother, Mahmoud explained that he used to earn a living as a taxi driver. But shortly after the revolution, his car was hijacked at gunpoint by a local gang. Like many of the amateur black marketeers responsible for Egypt’s current crime wave, Mahmoud is a far cry from the hardened criminal I had been expecting; he is just a young man hoping to earn enough money to move out of his parents’ house, marry his fiancée, and replace his stolen taxi.

Despite the commodity boom, Brazil is close to boiling point

People have lost faith in the political process 

By Daniel Hannan

How should a government respond when it is the target of nationwide protests? Swedish leaders reacted by wringing their hands and empathising, Turks by calling counter-demonstrations, Syrians by shooting the demonstrators.

The most original response has come from the President of Brazil, Dilma Rousseff, who brazenly co-opted the protesters to her cause. “The size of the demonstrations”, she said, “shows the energy of our democracy, the strength of the voice of the streets and the civility of our population.” Brazilians are certainly civil: you won’t find a cheerier, more relaxed people in the Western hemisphere. Yet they have taken to the streets in their hundreds of thousands – and, despite President Rousseff’s words, not entirely peacefully.

Brazil, the B of the BRIC countries, is now the seventh largest economy on earth. Yet, despite the commodity boom that has lifted the entire continent, its economy is stalling. Is the unrest economic? Not entirely: there has been a decade of growth and unemployment is low. The protests began over notionally financial issues – bus fares and the cost of hosting the Fifa World Cup – but they soon became a vehicle for anyone who was unhappy about anything.

If the unrest turns violent, disorder becomes self-reinforcing. In any population, potential looters outnumber police. Law enforcement works on the theory that not all the looters will go on a spree at the same moment – just as banking rests on the assumption that we won’t all simultaneously withdraw our deposits. When the hoodies realise that the forces of order are overstretched – during a blackout, for example – pillaging usually follows.

Television images of riots signal to every potential looter that the police have their hands full. It’s what caused the disruption in London two years ago; and Stockholm last month; in Istanbul last week; in São Paulo this week.

Why the pent-up frustration in Brazil? Largely because, as in much of South America, people have lost faith in the political process. Across the region, military regimes gave way in the late Eighties to civilians. Free-market politicians had their chance in the Nineties and blew it, presiding over corruption and cronyism. In country after country, voters turned in despair to the populist Left: Hugo Chávez in Venezuela, Evo Morales in Bolivia, Rafael Correa in Ecuador, Cristina Kirchner in Argentina, Luiz Inácio Lula da Silva, president Rousseff’s charismatic patron, in Brazil.

Liberté, Égalité, but Not Homosexualité

Why French Feminists Are Fighting Gay Marriage

By David A. Bell

The only thing clear right now about the U.S. Supreme Court’s pending decision on the Defense of Marriage Act -- the law that bars the federal government’s recognition of same-sex marriages -- is that Americans will read the verdict as the latest salvo in a long-running culture war. But it is worth remembering that this is a culture war that is increasingly being fought internationally -- and often in terms that do not line up with the debate in the United States. Americans have become accustomed to thinking of the argument against gay marriage as being motivated by religious conservatism. But that is not necessarily true elsewhere.

France offers an instructive example. Although 60 percent of the public supports gay marriage, the country has been beset by vitriolic protests since the National Assembly narrowly passed a marriage equality law last spring. From a distance, the hundreds of thousands of people who took to the streets may have seemed little different from the evangelical activists often seen at similar demonstrations in the United States. But Americans would be surprised to discover how different their motivations often are.

To be sure, religion is not irrelevant to the French protests. The most prominent protest leader, a comedian who adopted the nom de guerre Frigide Barjot, a snarky nod to the 1960s actress and sex symbol Brigitte Bardot, embraced a fervent Catholicism during a pilgrimage to Lourdes. (She now calls herself “Jesus’ press secretary.”) Catholic clergy have denounced the marriage legislation, and several religious associations have helped organize the protests.

But opponents of marriage equality in France’s mainstream parties have mostly kept their distance from religious groups. Relatively few of the street protesters interviewed by reporters talk of God, wave the Bible, or have verses from Leviticus tattooed on their arms. (Which should come as no surprise, given that France is a largely secular place, where barely half the population even still identifies itself as Catholic and regular religious attendance does not even reach ten percent.) Indeed, the most prominent opposition has come from the ranks of professional groups such as law professors and psychoanalysts, whose U.S. counterparts generally favor marriage equality by large margins. A considerable number of public intellectuals have also expressed loud opposition to the law, including the essayist Alain Finkielkraut, the novelist Jean d’Ormesson, and the philosopher Sylviane Agacinski (the wife of former Socialist Prime Minister Lionel Jospin).

Angry Young Men

Men end up dominating not only the top of society but also the bottom

by Nima Sanandaji

“'Angry young men' lack optimism.” This was the title of a BBC News story earlier this year, exploring the deeply pessimistic views that some young working class British hold about their own future. Two-thirds of the young men from families of skilled or semi-skilled workers, for example, never expect to own their own home. Angry young men, this time of immigrant origin, were also recently identified as the group causing riots in Swedish suburbs such as Husby. As Swedish Prime Minister Fredrik Reinfeldt noted, the riots were started by a core of “angry young men who think they can change society with violence”.

The social unrest occurring in Western Europe is often ascribed to the lack of integration into society among immigrants. It is true that dependency of public handouts rather than self-reliance has become endemic in Europe’s well‑entrenched and extensive welfare states. In Norway for example, the employment rate of immigrants from Asia is only 55 percent, compared to 70 percent for the non-immigrant population. Amongst African immigrants the figure is merely 43 percent.  In neighboring Sweden, a recent government report noted that the employment rate of Somalians was merely 21 percent. This can be compared to 46 percent in Canada and 54 percent in the US for the same group. The low incentives for transitioning from welfare to work in Sweden and Norway compared to in Canada and the US explain at least part of this difference.

But a failure of integration is hardly the sole explanation for the social unrest which extends well beyond immigrant youth. Why not add another relevant perspective to the puzzle, namely the increasing marginalization that some young men feel across the continent? This frustration is hardly an excuse for violence, but relates to important social phenomena which deserve to be explored, and targeted with the right policies.

A Light Fails In Egypt

Tyranny relies on despair

by WALTER RUSSELL MEAD

Is Egypt’s revolution falling apart? Clashes between anti-government protestors and Muslim Brotherhood supporters turned deadly yesterday, leaving at least three—including an American college student—dead. These clashes come ahead of massive country-wide demonstrations against President Morsi scheduled for Sunday. The NYT reports that on-the-ground forces are even speaking of a civil war:

The use of firearms is becoming more common on all sides. Secular activists who once chanted, “peaceful, peaceful,” now joke darkly about the inevitability of violence: “Peaceful is dead.”

…Egypt’s most respected Muslim cleric warned in a statement this weekend of potential “civil war.”

It’s hard for the American press to wrap its head around what’s happening in Egypt. The Western media instinctively wants to view the conflict as Islamists vs. secularists or liberals, with the future of democracy at stake. The reality is both darker and more complicated, but at best only a handful of journalists have the intellectual chops to make sense of this picture, or the writing ability to help American readers understand a reality so different from our own experience here at home.

Leslie Chang gets closer than most in this piece in the New Yorker, but the problems are even deeper than the ones she puts her finger on. Based on interviews with leaders in the anti-Morsi movement, Chang correctly points out that Egypt’s opposition is neither particularly coherent nor interested in governing. The looming protests were organized by a movement known as Tamarod, or “rebellion” in Arabic—a movement founded mostly by young Egyptians whose sole goal is to drive Morsi from power. ”I have yet to meet a politician with a substantive plan to overhaul a system of food and fuel subsidies that eats up almost one third of the budget, or to reform the education sector, or to stimulate foreign investment.”

She continues:

After two years of watching politicians on both sides of the fence squabble and prevaricate and fail to improve their lives, Egyptians appear to be rejecting representative democracy, without having had much of a chance to participate in it. In a country with an increasingly repressive regime and no democratic culture to draw on, protest has become an end in itself—more satisfying than the hard work of governance, organizing, and negotiation. This is politics as emotional catharsis, a way to register rage and frustration without getting involved in the system.

It would be a mistake to attribute the ineffectiveness of Egypt’s opposition to the purely personal failings and intellectual blind spots of the people currently prominent in its ranks. We are looking at something more deeply rooted and harder to fix. An intense rage and dissatisfaction with the status quo without any idea in the world how to make anything better: this is the typical condition of revolutionary movements in countries without a history of effective governance or successful development. It is also often typical of political movements in countries dominated by a youth bulge. The unhappiest countries are the places where this large youth bulge comes up against failed governance and curdled hope. Think Pakistan, where a comprehensive failure of civil and military leadership is turning one of the world’s most beautiful countries into one of its most miserable ones.

Inexperienced 18 years olds who have grown up in corrupt, poorly governed societies, and been educated in trashy schools by incompetent hacks know very well that the status quo is unacceptable. Young people who know they are being ripped off and abused are typically not very patient. Throw in healthy doses of sexual frustration and contempt for an establishment that has lost confidence in its own capacity to lead, and you have a cocktail much more explosive than anything Molotov knew.

The Stories Germans Tell Themselves

Things you can hear in Berlin

By  RAYMOND ZHONG

You hear a pretty consistent story about Europe's economic troubles from people in the German capital. Aspects of this story are fair—the cloistered but earnest perspective of a country removed from the worst of the crisis. The rest is self-pleasing bunk.

You hear, for instance, that the crisis originated in Southern countries and is therefore those countries' to solve. The sense of the crisis as somebody else's problem has been palpable in German policy makers' utterances since 2010, but it's worrisome that it persists even in this election year. European governments that haven't been voted away by the economic awfulness have at least had to address it to get re-elected.

Ahead of September's German vote, by contrast, it's hard to find many politicians talking publicly about the euro zone at all. "Germany is on a different planet in this debate," Klaus Deutsch, the head of Deutsche Bank research in Berlin, told me recently.

You also hear in Germany that Berlin can't lead Europe, putting aside the fact that it already does. You hear—or I do at least, in Germany more often than anywhere else in Europe—that the Continent imported its financial woes from the U.S., that America's housing bust is truly and deeply to blame.

You hear that Germany has benefited from the euro, without the slightest acknowledgment that this might be obvious—an export-dependent nation will always benefit from an undervalued currency—and hence a smug thing to say. You hear that Germany has prospered because it sells more than it buys, and because it earns more than it spends.

Fallacies die hard, if ever.

With the Environment, Paul Krugman Forgets the Poor

By Jeffrey Dorfman

President Obama gave a major environmental speech this week, laying out proposals to force more environmental regulation on the U.S. economy in order to allegedly save the world from the dangers of climate change. Essentially admitting that no environmental proposal is going to pass the Republican-controlled House, Obama has apparently decided that he will take action on his own. Given that he does not face any future elections, this presumably makes some sense from his point of view. The question is: will it be good for either the economy or the environment?

The environmental question is somewhat trickier than people think. Even if one accepts that human-related greenhouse gas emissions are causing global warming, this is not all bad for all people. More people die of cold-related causes than heat-related ones every year. Colder regions will gain longer growing seasons, lower heating costs in the winter, and fewer cold-related deaths. Advocates for action in response to global warming should at least acknowledge that even according to their own models there are some people and places in the world that would be winners from climate change. When we combat it, we harm those groups.

Then there is the question of whether new technologies designed to replace fossil fuel as energy sources are really better for the environment. For example, everybody except American presidential candidates knows that corn ethanol does not generate a gain for the environment. It is really a slight negative in terms of total energy balance, and then adds major negative effects on land use patterns and global food prices that are bad for the environment and burdensome on poor people. Electric cars are not zero-emission vehicles. They just separate the emissions from the car, moving them to the power plant used to generate the electricity that goes into charging the car. Whether a hybrid car is really better for the environment over its entire lifecycle is still a matter of debate. Wind power causes additional bird deaths, noise that impinges on the lifestyles of nearby residents, and certainly changes the viewscapes in many beautiful natural areas that just happen to be windy.

Plutocrat Protection Act

A different set of rules

by David Conway     

Hot on the heels of the latest annual Bilderberg get-together in Berkshire, England, political leaders at the just-concluded G8 summit in Lough Erne, Northern Ireland, announced that the EU and US intend to broker a free-trade agreement between them by the end of next year, with talks towards one due to begin next month.

How should supporters of free-markets respond to the news of such an agreement – with jubilation, indifference, or dismay? Prima facie, such a deal can only be good news. The removal or lowering of tariffs fosters trade and thereby supposedly facilitates mutually beneficial international division of labour which in turn, by fostering a greater interdependency between nations, reduces the chances of war between them.

In reality, however, the prospect of such an agreement is anything but a cause for celebration for freedom lovers. The problem is that so called international ‘free-trade’ deals are invariably anything but truly such. They formalize highly managed trade in ways that are often deeply detrimental to the interests of ordinary citizens of the countries which are parties to them.

Why is that so?

Well, along with the reduction and elimination of tariffs on goods imported between participating states, such agreements involve mutual acceptance of common regulations and standards in the name of the harmonization of trade and creation of a level playing-field. In reality, such regulations invariably stifle genuine competition between producers and potential producers, favoring larger, already established corporations over new entrants, since compliance costs invariably favor bigger units and not smaller new entrants. As was observed about the impending deal by the libertarian-minded Conservative MP Douglas Carswell:

Simply allowing willing buyers and sellers to trade freely with one another is not quite what the architects of this trade deal have in mind… [W]hat is envisaged might be better described as a mercantilist arrangement, drawn up by officialdom on both sides of the Atlantic. Far from free trade with mutual standard recognition, the small print is all about common standards, which define under what conditions transatlantic trade is permitted….  If that was not complicated enough, all kinds of vested interests are already lobbying to make sure the rules get written a certain way – preferably one that favors them, but shuts out their rivals. 

What's Really 'Immoral' About Student Loans

It's not so much the interest rates but rather the principal of the thing

By GLENN HARLAN REYNOLDS

Unless Congress acts, interest rates for government subsidized student loans will double to 6.8% from 3.4% on July 1. In May, House Republicans passed a bill that would index rates on new loans to the rate on 10-year Treasurys (currently about 2.6%), plus 2.5 percentage points, with an 8.5% cap. But with little Democratic support in the Senate, that bill is dead in the water.

Most Democrats want to lock the current 3.4% rate in place for two more years while Congress debates a "fairer" solution. Massachusetts Sen. Elizabeth Warren has even proposed letting students borrow directly from the government at the same ultra-low rate that banks currently get on short-term loans from the Federal Reserve—0.75%. She calls the Republican proposal "immoral."

In the student-loan world, there's immorality to spare—not in the still historically low interest rates, but in the principal of the thing. Student debt, which recently surpassed the trillion-dollar level in the U.S., is now a major burden on graduates, a burden that is often not offset by increased earnings from a college degree in say, race and gender issues, rather than engineering.

According to an extensive 2012 analysis by the Associated Press of college graduates 25 and younger, 50% are either unemployed or in jobs that don't require a college degree. Then there are the large numbers who don't graduate at all. According to the National Student Clearinghouse Research Center, more than 40% of full-time students at four-year institutions fail to graduate within six years. The National Center for Education Statistics reports that almost 75% of community-college students fail to graduate within three years. Those students don't have degrees, but they often still have debt.

Promises of a free lunch are as old as politics

Paul Krugman: A broken window equals economic strength

By Benjamin Zycher

It truly is amazing. That a Nobel prize-winning economist can believe utter nonsense, write utter nonsense, and defend utter nonsense, all in the service of a “climate” policy agenda that is remarkably weak in terms of the underlying peer-reviewed science, and that would have virtually no effect on temperatures under any set of mainstream assumptions. I refer to thelatest from Professor Paul Krugman, who actually argues, presumably with a straight face, that a forced closure of some coal-fired electric generating plants would force new investment in power plants and increase average power prices, thus yielding “an increase in spending” and a “positive effect” on the economy.

Wow. Remember the broken window fallacy? If a window is broken, the result is more employment and economic activity, because, obviously, someone has to pay someone else to replace the window. Sadly, this story leaves out the spending on something else that the first someone would have undertaken had the window not been broken in the first place. The broken window results in a reallocation of resources and not an increase in aggregate wealth; that is a reality that any student in Economics 101 should learn. The spending forgone on something else offsets the dollars spent replacing the window, but in Mr. Krugman’s world, the investments in new power plants and the higher spending on electricity represent new spending that otherwise would not have been made, because without the climate rules the dollars would have remained hidden in mattresses. Or something.

That the promulgation of new rules imposing large costs but yielding no benefits might have the indirect effect of increasing uncertainty and decreasing “spending” is a possibility not considered by Mr. Krugman. Nor is the larger effect of wealth destruction by regulation a parameter that he considers. One wonders why there is any “spending” at all in the absence of federal actions. What is clear, however, is that promises of a free lunch are as old as politics. And it is politics rather than economics that Mr. Krugman is practicing. Would the economy suffer if people spent less for access to the New York Times? 

The question answers itself.