links for 2008-07-05

• The intergenerational transmission of risk and trust attitudes- Vox EU
• Time with the kids: Parental education and child care- Vox EU
• Fading Reciprocity: Challenges to Global Rules - Vox EU
• Questions for Robert Reich - NYTimes.com 
• Good news for the fourth of July - Brad Setser
• Types of Mobility - Consider the Evidence
• The political economy of networks - Crooked Timber

Comments

[hari]

VOX EU - Fading reciprocity in international trade policy reflects more on ending of GATT instruments by opting for global WTO regime; US penchant for FTA (with no reciprocal commitments).

Interesting (for old timers like me who spend a life time on trade and development under UNCTAD/GATT/ITC) to see how we tried hard to introduce concept of trade reciprocity in international negotiations on tariffs and trade from 1970s-on. Until WTO and globalization made trade reciprocity a secondary condition of negotiations, whereas politics of global financial infuence and geopolitical considerations was central to US negotiators.

[Elvis]

Just noticed that when you double-click a word in an article on the NY Times page, it will bring up a dictionary window automatically.... very neat.

[anne]

http://www.nytimes.com/2008/07/05/world/americas/05argentina.html?hp&pagewanted=print

July 5, 2008

Argentina Export Tax Sets Off Political Furor
By ALEXEI BARRIONUEVO

RIO DE JANEIRO — Argentina's lower house of Congress was preparing to vote late Friday night on whether to approve a government tax program for agricultural exports in the latest chapter of a bitter battle between farmers and the government of President Cristina Fernández de Kirchner.

Farm leaders said they were prepared to renew blockades of major highways and cut off exports of grains if the measure was approved. Hugo Biolcatti, the vice president of the Rural Society, said in a radio interview early in the day that if the tax passed, "there's a high possibility that the strikes will return."

The vote was unusual because the government of Mrs. Kirchner, as well as the government of her predecessor and husband, Néstor Kirchner, have not asked Congress to approve any major government action since Mr. Kirchner was elected in 2003.

Mrs. Kirchner, who was elected last October, has said that higher taxes on the agricultural sector are necessary to finance social programs and redistribute wealth. But farmers have accused the government of trying to squeeze their profits as the farmers' costs have been rising.

Demonstrators on each side of the debate, some beating drums, held vigils on Friday outside Congress in Buenos Aires. For the past two weeks a festive mood has overtaken Plaza de Congreso, which was covered with tents representing farmers, supporters of Mrs. Kirchner and others.

With tensions rising and her approval ratings plummeting, Mrs. Kirchner decided two weeks ago to allow Congress to debate the tax program she imposed in March without its approval.

The measure ties taxes on crops like soybeans to global commodity prices. Because those prices have been soaring, farmers have been paying higher export taxes and the government's tax revenues have boomed. The program caused a rebellion in Argentina's countryside.

The tax on soybeans, Argentina's most important farm export, had been 35 percent and it has floated to more than 44 percent, depending on global prices for the commodity....

[anne]

http://www.nytimes.com/2008/07/05/business/05chart.html?ref=business&pagewanted=print

July 5, 2008

Gas Was Once a Bigger Expense
By FLOYD NORRIS

WHICH costs more, the car or the gasoline?

In the United States, the quarter that just ended was probably the first period since the early 1980s that a bigger proportion of the consumer's pocketbook was spent on gasoline, oil and other energy products than was spent on motor vehicles.

But even as the price of gasoline has soared to more than $4 a gallon, Americans are spending a much smaller share of their budgets on fuel than they did at the time of the last spike in oil prices, in 1980.

The accompanying chart shows that spending on motor vehicles — both buying them and fixing them — tends to take a smaller share of spending during recessions, as consumers cut back on big ticket items. Based on the dismal figures for car and truck sales in June that came out this week, that appears to be happening. And the 4.2 percent share of consumer spending that went to cars in the first quarter seems likely to have fallen in the quarter that just ended.

But the share devoted to the purchase of gasoline and other fuels certainly increased, even though there are indications Americans have cut back on driving. Gasoline prices in the quarter averaged more than 20 percent higher than in the first three months of 2008. The share of spending on fuels seems likely to have risen well above the 4.1 percent mark recorded then.

Historically, rapidly rising gasoline prices have hurt the auto industry, and that seems to be happening now. The carmakers have no trouble selling fuel-efficient vehicles, particularly hybrids that can run on electricity as well as gasoline. Until recently the demand for those vehicles was limited, though, and it is not easy to increase production quickly. But the gas-guzzling vehicles, particularly sport utility vehicles and pickup trucks, have plunged in demand, leaving the carmakers with large inventories at a time when prices for similar used vehicles have fallen sharply.

Even before gasoline hit $4 a gallon, the motor vehicle share of personal consumption expenditures had fallen to its lowest level since shortly after World War II, when the automobile industry was just beginning to increase production after converting to military production during the war....

[anne]

http://angryarab.blogspot.com/2008/07/but-these-cases-of-disaster-capitalism.html

July 5, 2008

"But these cases of disaster capitalism are amateurish compared with what is unfolding at Iraq's oil ministry. It started with no-bid service contracts announced for ExxonMobil, Chevron, Shell, BP and Total (they have yet to be signed but are still on course). Paying multinationals for their technical expertise is not unusual. What is odd is that such contracts almost invariably go to oil service companies--not to the oil majors, whose work is exploring, producing and owning carbon wealth. As London-based oil expert Greg Muttitt points out, the contracts make sense only in the context of reports that the oil majors have insisted on the right of first refusal on subsequent contracts handed out to manage and produce Iraq's oil fields. In other words, other companies will be free to bid on those future contracts, but these companies will win." *

* http://www.thenation.com/doc/20080721/lookout

-- As’ad AbuKhalil

[anne]

http://angryarab.blogspot.com/2008/07/american-military-said-airstrikes-by.html

July 5, 2008

"The American military said airstrikes by its attack helicopters in eastern Afghanistan hit two vehicles carrying insurgents on Friday, but a provincial governor said 22 civilians, including a woman and a child, had been killed." *

* http://www.nytimes.com/2008/07/05/world/asia/05afghan.html

-- As'ad AbuKhalil

says...

What needs to be made clear is that repeatedly civilians are killed in the midst of the war in Afghanistan, and war it is and war in what is among the very poorest of countries that is further impoverishing its people. There is no reason so far as I can tell to believe we are anywhere near to leaving Afghanistan, after all the matter has never been discussed in the campaign.

[anne]

http://www.irinnews.org/Report.aspx?ReportId=79078

July 3, 2008

Top UN Official Highlights Plight of Children
By IRIN

KABUL - Nowhere in the world are children suffering as much as in Afghanistan, a top UN official has said.

Radhika Coomaraswamy, special representative of the UN Secretary-General for Children and Armed Conflict, told reporters in Kabul on 3 July that during her six-day visit to Afghanistan she had found that "it takes an Afghan child a very long time to smile." The conflict had killed, maimed and affected an increasing number of children, she said.

Coomaraswamy did not give any specific figures but said the number of children exploited by anti-government forces for military purposes had increased over the past few months. Children had also been used as "suicide attackers" by the Taliban, she said.

"This is a terrible situation… we urge all parties to the conflict, especially anti-government forces, to take measures to prevent the use of children in conflict."

Children were also being recruited into the Afghan National Police and pro-government militias, where they were vulnerable to sexual abuse, Coomaraswamy said. "This is illegal and should be eradicated."

"Easy targets"

According to the UN, children have been detained by all the warring parties, but no one knows exactly how many children are being held in detention centres - even those run by US forces and the government.

The UN Children's Fund (UNICEF) said children were often at even greater risk than those directly involved in the conflict.

[anne]

[Please forgive the absence of identification above; I am not sure what I or my computer did that was wrong, which is sort of spooky.]

[anne]

http://www.guardian.co.uk/environment/2008/jul/03/biofuels.renewableenergy/print

July 4, 2008

Biofuel Caused Food Crisis: Internal World Bank study delivers blow to plant energy drive
By Aditya Chakrabortty - Guardian

Biofuels have forced global food prices up by 75% - far more than previously estimated - according to a confidential World Bank report obtained by the Guardian.

The damning unpublished assessment is based on the most detailed analysis of the crisis so far, carried out by an internationally-respected economist at global financial body.

The figure emphatically contradicts the US government's claims that plant-derived fuels contribute less than 3% to food-price rises. It will add to pressure on governments in Washington and across Europe, which have turned to plant-derived fuels to reduce emissions of greenhouse gases and reduce their dependence on imported oil.

Senior development sources believe the report, completed in April, has not been published to avoid embarrassing President George Bush.

"It would put the World Bank in a political hot-spot with the White House," said one yesterday.

The news comes at a critical point in the world's negotiations on biofuels policy. Leaders of the G8 industrialised countries meet next week in Hokkaido, Japan, where they will discuss the food crisis and come under intense lobbying from campaigners calling for a moratorium on the use of plant-derived fuels.

It will also put pressure on the British government, which is due to release its own report on the impact of biofuels, the Gallagher Report. The Guardian has previously reported that the British study will state that plant fuels have played a "significant" part in pushing up food prices to record levels. Although it was expected last week, the report has still not been released.

"Political leaders seem intent on suppressing and ignoring the strong evidence that biofuels are a major factor in recent food price rises," said Robert Bailey, policy adviser at Oxfam. "It is imperative that we have the full picture. While politicians concentrate on keeping industry lobbies happy, people in poor countries cannot afford enough to eat."

Rising food prices have pushed 100m people worldwide below the poverty line, estimates the World Bank, and have sparked riots from Bangladesh to Egypt. Government ministers here have described higher food and fuel prices as "the first real economic crisis of globalisation".

President Bush has linked higher food prices to higher demand from India and China, but the leaked World Bank study disputes that: "Rapid income growth in developing countries has not led to large increases in global grain consumption and was not a major factor responsible for the large price increases."

Even successive droughts in Australia, calculates the report, have had a marginal impact. Instead, it argues that the EU and US drive for biofuels has had by far the biggest impact on food supply and prices.

Since April, all petrol and diesel in Britain has had to include 2.5% from biofuels. The EU has been considering raising that target to 10% by 2020, but is faced with mounting evidence that that will only push food prices higher.

"Without the increase in biofuels, global wheat and maize stocks would not have declined appreciably and price increases due to other factors would have been moderate," says the report. The basket of food prices examined in the study rose by 140% between 2002 and this February. The report estimates that higher energy and fertiliser prices accounted for an increase of only 15%, while biofuels have been responsible for a 75% jump over that period.

It argues that production of biofuels has distorted food markets in three main ways. First, it has diverted grain away from food for fuel, with over a third of US corn now used to produce ethanol and about half of vegetable oils in the EU going towards the production of biodiesel. Second, farmers have been encouraged to set land aside for biofuel production. Third, it has sparked financial speculation in grains, driving prices up higher.

Other reviews of the food crisis looked at it over a much longer period, or have not linked these three factors, and so arrived at smaller estimates of the impact from biofuels. But the report author, Don Mitchell, is a senior economist at the Bank and has done a detailed, month-by-month analysis of the surge in food prices, which allows much closer examination of the link between biofuels and food supply.

The report points out biofuels derived from sugarcane, which Brazil specializes in, have not had such a dramatic impact....