links for 2008-09-05

• Are exchange rates unpredictable? The asset pricing approach redux - Vox EU
• Wal-Mart Thrives When Democrats Are in Charge - WSJ.com
• Housing Expenditures and Wages - Richard Green
• Intellectual work induces excessive calorie intake - EurekAlert
• ‘The Question of Global Warming’: An Exchange - New York Review of Books
• Wage Insurance - Kevin Drum
• Global Property Bubbles: Not Bursting - Felix Salmon
• Hawks and Doves Living Together - Real Time Economics
• Employment watch - macroblog
• Who in U.S. Gets Hurt Most by Food-Price Inflation? - Zubin Jelveh
• ‘Pardon me while I retch’ - Willem Buiter

Comments

[anne]

http://www.nytimes.com/2008/09/05/world/05nations.html?ref=world&pagewanted=print

September 5, 2008

Donors' Aid to Poor Nations Declines, U.N. Reports
By NEIL MACFARQUHAR

Aid to poor nations has slumped even as higher food and energy prices and slowing global economic growth have made such assistance more urgent, according to a report released Thursday.

[anne]

http://www.nytimes.com/2008/09/05/world/americas/05cuba.html?ref=world&pagewanted=print

September 5, 2008

U.S. Offers Storm Aid to Cuba Only Through Relief Groups
By MARC LACEY

The State Department said that it had offered humanitarian aid to Cuban victims of Hurricane Gustav provided it does not go through the government of President Raúl Castro.

[anne]

http://www.nytimes.com/2008/09/05/world/europe/05cheney.html?hp&pagewanted=print

September 5, 2008

Cheney Backs Membership in NATO for Georgia
By STEVEN LEE MYERS

TBILISI, Georgia — Vice President Dick Cheney flew here on Thursday to deliver a forceful American pledge to rebuild Georgia and its economy, to preserve its sovereignty and its territory and to bring it into the NATO alliance in defiance of Russia.

Mr. Cheney spent only four and a half hours in Georgia, but the visit included a strong rebuke to Russia’s behavior and a highly symbolic visit to American troops unloading humanitarian supplies at the airport here within sight of an airplane factory that Russian bombs had damaged.

He arrived a day after the United States pledged $1 billion to help Georgia recover from its defeat by Russia’s armed forces, which continue to control two breakaway regions, as well as buffer zones in Georgia.

Standing beside President Mikheil Saakashvili, Mr. Cheney said that the United States had strongly supported Georgia since protests in 2003 ushered a democratic government to power and that it would continue to do so despite Russia’s proclamations that Mr. Saakashvili’s government was illegitimate.

“I assured the president as well of my country’s strong commitment to Georgia’s territorial integrity,” Mr. Cheney said after meeting with Mr. Saakashvili, without aides, for more than an hour, twice the scheduled time. “Georgia has that right, just as it has the right to build stronger ties to friends in Europe and across the Atlantic.”

The Bush administration has been Georgia’s most vocal supporter in its conflict with Russia, leaving diplomatic efforts to negotiate a cease-fire almost entirely to leaders from the European Union, including President Nicolas Sarkozy of France.

In his remarks with Mr. Saakashvili, though, Mr. Cheney left little room for negotiation, denouncing what he called “an illegitimate, unilateral attempt to change your country’s borders by force that has been universally condemned by the free world.”

Mr. Cheney reiterated previous administration statements that Russia risked its international standing, though with some of the strongest language yet.

“Russia’s actions have cast grave doubt on Russia’s intentions and on its reliability as an international partner, not just in Georgia but across this region and indeed throughout the international system,” he said.

It is not clear that the administration’s harsh criticism has had any discernible effect on Russia’s leaders....

[hari]

EU Foreign Ministers will consider German/FM/Steinmeir's request for a thorough and full account of The Caucasus conflict and Russian occupation of Georgian soil Aug 5-7.
This is now the crux of the matter- it'll have to consider US/Israeli military trainers inside SO when conflcit started.
Was Russia provoked or not? Can one maintain a sobre mind dealing with the antecendents of this caucasus imbroglio?

I expect Steimeir's request to be approved and an *independent/competent* party chosen to undertake the study in short-term and report to EU/FMs.

[anne]

http://www.nytimes.com/2008/09/05/us/politics/05women.html?hp&pagewanted=print

September 5, 2008

They Raise Children, Pray and Support Palin
By KIM SEVERSON

Gov. Sarah Palin has a following of Alaska women as dedicated to her as others were to a very different politician, Senator Hillary Rodham Clinton.

[Sometimes it takes a woman to promote stereotypes of women.]

[anne]

http://angryarab.blogspot.com/2008/09/us-counterterrorism-policies-have-not.html

September 4, 2008

"US counterterrorism policies have not only compromised other international agendas in Somalia, they have generated a high level of anti-Americanism and are contributing to radicalization of the population," concluded the report, entitled 'Somalia: A Country in Peril, a Foreign Policy Nightmare.' " * **

* http://allafrica.com/stories/200809040019.html

** http://www.eastafricaforum.net/2008/09/03/somalia-a-country-in-peril-a-policy-nightmare/

-- As'ad AbuKhalil

[anne]

Hari:

"Was Russia provoked or not? Can one maintain a sobre mind dealing with the antecendents of this caucasus imbroglio?"

Yes.... No....

[anne]

http://www.nytimes.com/2008/09/06/business/economy/06econ.html?hp&pagewanted=print

September 5, 2006

Unemployment Rate Rises to 6.1%
By MICHAEL M. GRYNBAUM

The nation’s jobless rate zoomed to a five-year high of 6.1 percent in August as employers slashed 84,000 jobs, the government reported.

[anne]

So then we have a loss of 605,000 jobs since January, with job losses in every month, where an average of 225,000 jobs a month were created through the 96 months of the Clinton Presidency. We have an employment recession, we have an income recession for ordinary workers. Since January income have grown more slowly than inflation in 7 or 8 months, including August. Real income is steadily falling along with employment.

This period of employment and income recession follows what was the weakest economic expansion since 1945.

[anne]

We went from a 52 month period in which job creation averaged 160,000 a month as opposed to the 225,000 through the Clinton Presidency. These 52 months were the finest for employment through the Bush Presidency. Now, rather than job creation job are being steadily lost and income is steadily declining.

Corporate revenue and saving however was at or near record levels through the Bush expansion, and has been holding remarkably well even this year along with fine worker productivity while jobs and income for ordinary workers are lost.

[anne]

http://angryarab.blogspot.com/2008/09/ever-since-it-bombed-taliban-from-power.html

September 4, 2008

"Ever since it bombed the Taliban from power in 2001, America has relied on air power in Afghanistan to make up for a shortage of troops. As the Taliban and other militants have gained strength, America has dropped more bombs, killing more civilians. Usually, as in Azizabad, the strikes are called in by American special forces, who are part of a counter-insurgency force that operates independently from Afghanistan’s NATO-led peacekeepers. According to American military figures, civilian deaths in airstrikes increased from 116 in 2006 to 321 in 2007. Over the same period, the number of American air-raids in Afghanistan increased by a third, and the number of bombs dropped doubled. Afghan officials say that in the past two months at least 165 civilians have been killed in four American airstrikes." *

* http://www.economist.com/world/asia/displaystory.cfm?story_id=12009906

-- As'ad AbuKhalil

[anne]

http://krugman.blogs.nytimes.com/2008/09/05/the-un-recession/

September 5, 2008

The Un-Recession
By Paul Krugman

[Chart] Recession? What recession?

I can’t wait to hear how the White House tries to spin today’s employment report. * But to be fair, this is an odd slowdown, by historical norms: no clear decline in GDP, no months of 6-digit job losses. Instead, the economy is being slowly ground down.

What I suspect, however, is that this is what the 21st-century business cycle looks like. The sharp slumps of the past partly reflected an inflation-prone environment, in which the Fed occasionally had to slam on the brakes; it also reflected a mainly goods-producing economy, with lots of inventories, in which recessions had a lot to do with inventory adjustments.

Anyway, what’s in a name? The reality is that the economy is in a lot of distress.

* http://www.bls.gov/news.release/empsit.toc.htm

[anne]

Again, we need to be aware how unusual this period has been and is. We have low interest rate, low and lowered taxes, increasing government spending as a portion of national income, deficit spending, increasing corporate revenue and saving, fine productivity growth, record strong international growth, and a weaker dollar. Nonetheless, the economy has never grown with relative strength through an expansion and is now distinctly weak.

[anne]

Paul Krugman and Mark Thoma have sought to explain the startling American relative economic weakness since the short and shallow recession ended in November 2001, but the explanations are obviously not complete and I have no sense why this should be so. Remember that the period of expansion marked the strongest period of international growth ever recorded, and yet....

[anne]

http://angryarab.blogspot.com/2008/09/if-we-extrapolated-out-iraqs-august.html

September 5, 2008

"If we extrapolated out Iraq's August death rate for civilians over 15 years, that would be 64,000 or not far from the toll in Lebanon's war. Let me repeat: The level of violence at this moment in Iraq is similar to what prevailed on average during one of the 20th century's worst ethnic civil wars! It is still higher than the casualty rates in Sri Lanka and Kashmir, two of the worst ongoing conflicts in the world. Only in an Orwellian society could our press declare the relative decline in monthly death tolls in Iraq to constitute 'calm' in an absolute sense." *

* http://www.juancole.com/2008/09/rambo-and-mean-girl.html

-- As'ad AbuKhalil

[Since even Barack Obama is busily telling us how pleased we should be that the surge has worked so well and that the time has come for Iraq to pay for, well, for what?]

[anne]

http://www.nytimes.com/2008/09/06/world/asia/06pstan.html?ref=world&pagewanted=print

September 6, 2008

U.S. Missiles Said to Have Killed at Least 6 on Afghan-Pakistani Border
By PIR ZUBAIR SHAH and JANE PERLEZ

It was the first of what American military officials said could be more raids to attack Taliban insurgents in Pakistan’s tribal region.

[Why I am so angry with the support for such a war from Obama and Biden....]

[anne]

http://angryarab.blogspot.com/2008/09/i-dont-like-fatwawawas-of-any-religion.html

September 4, 2008

I don't like fatwawawas of any religion, and the only fatwawawa that I would issue if I had that power, would be the fatwawawa to end all fatwawawas. But once in a while, somebody issues a good fatwawawa. Here, Ayatullah Muhammad Husayn Fadlallah issues warnings about the mistreatment of foreign workers in Lebanon, and their dehumanization. *

* http://www.al-akhbar.com/ar/node/89724

-- As'ad AbuKhalil

[anne]

http://angryarab.blogspot.com/2008/09/from-daily-star-these-are-very-common.html

September 4, 2008

From the Daily Star: these are very common in Lebanese newspapers -

" LOST

ETHIOPIAN HOUSEMAID

M***** G**********

left her employer's house on 17-8-08
and did not return. Whomever
employs her will be subject to
legal pursuit.

(961) 3 ******
(961) 9 ****** "

(Printed edition, 25-8-08.)

-- As'ad AbuKhalil

[Why the Difference?]

"How come all these markets aren't crashing like the US? I think it's simple: they had the bubbles, they just didn't have the atrocious underwriting."

Apparently, alone among the nations, there is widespread belief in borrowing, and not paying back. What moral standard is being taught in our public school system that is different than overseas?

[Inflation is the Enemy]

Conde Nast...."since 2000, "the lowest-income Americans consumers have seen their price index rise by over 7% more than the highest-income American consumers"

Inflation is a regressive tax. It makes inequality worse. It is a terrible way to raise funds for operations.

says...

http://www.epi.org/printer.cfm?id=3099&content_type=1&nice_name=webfeatures_econindicators_jobspict_20080905

September 5, 2008

Payrolls Contract for Eighth Month in a Row
By Jared Bernstein and Heidi Shierholz with research assistance from Tobin Marcus

The unemployment rate jumped to 6.1% last month, the highest jobless rate since September 2003, and payrolls fell by 84,000 jobs, the eighth month in row of consecutive declines, according to today’s report from the Bureau of Labor Statistics. In every period since 1948 when payrolls have declined this consistently, the economy has been in an official recession.

Both rising unemployment and declining payrolls show some signs of acceleration. Revisions to June and July subtracted another 58,000 from payrolls, such that over the past three months, the average job loss has been 81,000, compared to 67,000 over the prior three months. Since April, the jobless rate is up by 1.1 percentage points, from 5.0% to 6.1%, the largest four-month jump since 1981. Since unemployment bottomed out in March of last year, over 2 million have joined the jobless rolls.

Since January, payrolls are down by 605,000, and private-sector payrolls are down by 772,000 since November 2007 (their prior peak). Since government is less sensitive to the business cycle, often adding jobs while other industries are shedding workers, private-sector losses are more indicative of the extent of weakness in the job market.

Notably, the jump in unemployment occurred exclusively among adults, mostly concentrated among persons 25 years and over (teenage unemployment fell slightly in August). The increases for these adults occurred in every education group. Even college graduates had a more difficult time finding work in August, as their jobless rate rose from 2.4% to 2.7%, the highest college unemployment rate since August 2004. At the other end of the educational spectrum, the jobless rate for adults with less than a high school degree jumped to 9.6%, their highest rate since May 1996.

At 10.6%, African-American unemployment hit double-digits last month, up from 9.7% last month. The jump for blacks last month was exclusively among women, whose unemployment increased from 8.3% to 10.0%. Hispanic unemployment was also up more than the average, from 7.4% in July to 8% in August. (For more information about this month’s job data for African Americans and Hispanics, click here.)

Other signs of deepening weakness in the job market include the underemployment rate of 10.7% in August and the decline in the employment rate, from 62.4% to 62.1%. Underemployment includes part-timers who would prefer full-time jobs, and while this group did not grow in August, there are 5.7 million workers in this category, a recessionary level. The decline in the employment rate is a clear recessionary signal as well, and was driven last month by large job losses in the household survey. Taken together, these indicators show that employers are responding to weak consumer demand both by cutting workers and cutting hours.

Job losses were widespread across industries, with health care and government, once again, the only exceptions to the negative trends. Despite significant improvement in our trade balance, manufacturing losses continue to mount, down 61,000 jobs last month, mostly in durable manufacturing (-55,000). In other words, our improving net exports have not shown up as factory jobs. Given sharply declining car sales, employment in the auto sector was especially hard hit last month, down 39,000, the largest monthly loss on record going back to 1990, outside of a work stoppage (strike).

Given the weakness in job creation, large numbers of job seekers are stuck in unemployment. The number of those who have been jobless for more than six months increased by over half a million over the last year, including 160,000 from July to August. In August, almost one in five unemployed workers (19.5%) had been unemployed for more than six months, the highest level in over three years.

Wage growth improved slightly in August though it still likely lags inflation. Hourly wages grew 3.6% compared to a year ago, a bit ahead of the comparable measure for July of 3.4%. Given the decline in average weekly hours over the past year, weekly earnings rose more slowly than the hourly rate: 3.3%. The most recent inflation reading is for July, when prices rose 5.6% over the year. Falling gas prices should bring this measure down in August, but the buying power of workers’ paychecks will still continue to fall....

[anne]

Sorry, that was me and that was my fault.

[anne]

http://www.epi.org/printer.cfm?id=3100&content_type=1&nice_name=webfeatures_econindicators_jobspict_20080905b

August 5, 2008

Job Market Much Worse Compared to Year Ago for Blacks, Hispanics
By Algernon Austin

African American unemployment reaches double digits

For the first time in three years, the African American unemployment rate has entered the double digits. In August, the black unemployment reached 10.6%, up 0.9 percentage points from July and up 2.9 points from a year ago. In other words, more than half a million more blacks were unable to find work last month compared to August 2007.

This August’s jump in the African American unemployment rate was driven by an increase in black women’s unemployment, which increased 1.7 percentage points, from 8.3% in July to 10.0% in August. A year ago (August 2007), the black female unemployment was 7.5%. This year, black men’s unemployment rate declined slightly from July to August, going from 11.3% to 11.2%, but it is still significantly higher than it was just a year ago when it was a much lower at 7.9%.

Young black adults and recent college graduates (25-29 year olds) are finding it difficult to find work. Their unemployment has risen from 5.1% in August 2007 to 6.9% last month. As the economic downturn proceeds, it will continue to have a disproportionate effect on African Americans.

Hispanic unemployment up 2.5 points

The Hispanic unemployment rate for August is up 2.5 percentage points over the past year, growing from 5.5% in August 2007 to 8.0% in August 2008. This percentage point change translates to almost 600,000 more Hispanics unemployed.

Hispanic women’s unemployment rate is higher than Hispanic men’s. In August, 8.3% of Hispanic women were unemployed compared with 7.7% of Hispanic men. Hispanic men, however, have seen a larger increase in their unemployment rate over the past year—relative to August 2007, Hispanic men’s unemployment increased 3.1 percentage points, while Hispanic women’s has grown 1.6 percentage points in the past year.

Hispanic workers, like everyone else, have been hurt by the economic downturn, but because of the large share of Hispanics working in the construction industry, the collapse of the housing market has been especially detrimental for these workers.

[Julio]

"Job Market Much Worse Compared to Year Ago for Blacks, Hispanics"

It's worse than it looks, as it doesn't account for our grotesque incarceration rates:

Plight Deepens for Black Men, Studies Warn

By ERIK ECKHOLM
Published: March 20, 2006

...

official unemployment rates can be misleading because they do not include those not seeking work or incarcerated.
...
These were among the recent findings:

¶The share of young black men without jobs has climbed relentlessly, with only a slight pause during the economic peak of the late 1990's. In 2000, 65 percent of black male high school dropouts in their 20's were jobless — that is, unable to find work, not seeking it or incarcerated. By 2004, the share had grown to 72 percent, compared with 34 percent of white and 19 percent of Hispanic dropouts. Even when high school graduates were included, half of black men in their 20's were jobless in 2004, up from 46 percent in 2000.

¶Incarceration rates climbed in the 1990's and reached historic highs in the past few years. In 1995, 16 percent of black men in their 20's who did not attend college were in jail or prison; by 2004, 21 percent were incarcerated. By their mid-30's, 6 in 10 black men who had dropped out of school had spent time in prison.

¶In the inner cities, more than half of all black men do not finish high school.
...

[Winslow R.]

Makin just put up his September post, looking for a redesign……

“Maybe the shared stake of the global economic system and financial stability will aid in the design of a superior financial and regulatory framework. Be assured, however, that such a framework is not yet in place, nor is its outline very clear.
Risk is always with us. In modern times, so, too, is intensified systemic risk. We are just more aware of both than we have been for a while. Maybe that is a good thing.”

http://www.aei.org/publications/pubID.28565/pub_detail.asp

Pimco’s McCulley is looking for a monetary redesign…..

“Therefore, I do. Specifically, Mr. Bernanke put squarely on the table the need for “macroprudential” regulatory arrangements, designed to temper the inherent pro-cyclicality of existing regulatory/capital requirement arrangements. If established and successful in implementation, a macroprudential approach would temper the Minsky-esque boom-bust tendencies of banking and the capital markets.
Such an outcome would, in turn, have direct implications for monetary policy. More specifically, if the transmission mechanism between the Fed funds rate, financial conditions and aggregate demand could be made more tightly bound, it would reduce the overall cyclical range the Fed would need to pursue for the Fed funds rate. ”
http://www.pimco.com/LeftNav/Featured+Market+Commentary/FF/2008/Global+Central+Bank+Focus+McCulley+Sept+2008+In+the+Fullness+of+Time.htm

….while Pimco’s Gross is looking for a fiscal bailout....

“The bill for our collective speculative profligacy, obvious in the deflating asset markets, can be paid now or it can be paid later. Those aspiring for a perfect 800 on the Wall Street policy exam would conclude that the tab will be less if paid up front, than if swept under a rug of moral umbrage intent on seeking retribution for any and all of those responsible. Now that the Fed has spent 12 months proving that it “knows something…knows something,” it is time for the Treasury to do likewise. ”
http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2008/Investment+Outlook+Bill+Gross+Sept+2008+Bull+Market.htm

[Patricia Shannon]

I can really believe this. I get much hungrier when I'm working at an IT job, even though I'm just sitting down most of the day, than when I'm at home or working at a more physical job. Years ago, I read of a study that said mental work causes a person to require more sleep than physical work. Since a major function of sleep appears to be processing experiences we had while we were awake, this makes sense.
http://www.eurekalert.org/pub_releases/2008-09/ul-iwi090408.php

Quebec City, September 4, 2008—A Université Laval research team has demonstrated that intellectual work induces a substantial increase in calorie intake. The details of this discovery, which could go some way to explaining the current obesity epidemic, are published in the most recent issue of Psychosomatic Medicine.

The research team, supervised by Dr. Angelo Tremblay, measured the spontaneous food intake of 14 students after each of three tasks: relaxing in a sitting position, reading and summarizing a text, and completing a series of memory, attention, and vigilance tests on the computer. After 45 minutes at each activity, participants were invited to eat as much as they wanted from a buffet.

The researchers had already shown that each session of intellectual work requires only three calories more than the rest period. However, despite the low energy cost of mental work, the students spontaneously consumed 203 more calories after summarizing a text and 253 more calories after the computer tests. This represents a 23.6% and 29.4 % increase, respectively, compared with the rest period.

Blood samples taken before, during, and after each session revealed that intellectual work causes much bigger fluctuations in glucose and insulin levels than rest periods. "These fluctuations may be caused by the stress of intellectual work, or also reflect a biological adaptation during glucose combustion," hypothesized Jean-Philippe Chaput, the study's main author. The body could be reacting to these fluctuations by spurring food intake in order to restore its glucose balance, the only fuel used by the brain.

"Caloric overcompensation following intellectual work, combined with the fact that we are less physically active when doing intellectual tasks, could contribute to the obesity epidemic currently observed in industrialized countries," said Mr. Chaput. "This is a factor that should not be ignored, considering that more and more people hold jobs of an intellectual nature," the researcher concluded.
/

[gosha03]

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