Links 9/8/09

Google Books: A Metadata Train Wreck Language Log

Migrants hit by global downturn BBC

President procrastinator Financial Times. Ouch.

In August, QE hit the economy UK Bubble

Nice Depiction of a System in Decline John Robb

In August, QE hit the economy UK Bubble

Interest rates ‘could rise sharply early next year’ Telegraph. In contrast to our post on deflationistas looking less extreme of late.

LSE backs high-frequency traders Financial Times

Exclusive: Fuld says being “dumped on” for Lehman failure Reuters

Antidote du jour:

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  1. eh

    I think the job prospects and wages of people in many countries have taken heavy hits for years from “migrants”, but few people ever seemed too concerned about that, least of all the BBC, which most of the time seems never to have met a migrant it didn’t like.

  2. Swedish Lex


    Not related to this particular post of yours but furhter to my comments on the EU’s new momentum to regulate financial markets more and differently in the long term (and the consequential impact on U.S. legislation and markets).

    Bruegel, the Brussels think tank, has just published “memos” to the in-coming EU Commission, which will be appointed later this year. It is a good read as it is written by persons with deep insights into how the EU works and thus also into how matters actually, realistically, might pan out.

    An example on the general direction of market regulation (also in line with what I have been writing on these pages in the past and my comment that the financial crisis at its core is a matter of gevernance):

    “Fifth, the crisis risks calling into question the
    very legitimacy of the European Union. Over the
    past twenty years EU integration has mostly
    been associated with liberalisation (although
    perceptions differ from country to country). Yet
    the crisis is widely (and rightly) perceived as a
    major failure of financial liberalisation,
    responses to which cannot consist of mere
    tinkering with regulation. The situation calls
    instead for a major redefinition of the relative
    roles of governments and markets, certainly in
    financial markets and perhaps even in other
    areas. This begs the question as to whether such
    increased public intervention will take place at
    the member-state or EU (or even global) level.
    Ultimately the issue is, therefore, whether the
    potential backlash against liberalisation will
    produce a collateral backlash against the EU.
    Indeed a backlash against the market could
    indeed easily turn into a backlash against the
    very bedrock of European economic integration,
    the single market. Or will the EU be part of the
    redefinition of the relative roles of states and
    markets? This question leads in turn to the issue
    of governance reform, and the response that is
    provided to this question could have
    considerable consequences for the EU itself.”

    PDF download:

  3. Swedish Lex

    On Daniel Dombey’s FT piece re. Obama/Afghanistan.

    I pitched a few stories to Dombey when he covered EU affairs in Brussels a few years back. It is a good article although I am not surprised that he does not go further into how the issue is linked with NATO and the EU.

    On the whole, there is a perception in the EU that Obama is too absent and distant from European affairs. Remember that EU-U.S. relations were in a deep freezer during the 8 Bush years (not because of the Europeans, I might add) and that pro-active de-frosting from the U.S. is required.

    EU citizens are more and more confused as to whatever our troops are doing in Afghanistane (my 8 year old daughter has friends in her class whose fathers are in Afghanistan with French elite forces and the latter are not picknicking there). Initially, European leaders sent troops to strike pre-emptively at terrorists. Since then, the mission has morphed into ill-defined missions to protect and prmote the civil rights of women and children. A worthy cause in itself, but hardly a case for conducting a war on the other side of the globe.

    The Realpolitik is probably that the Europans (the UK is a special case, though) do not (yet) have a good excuse to withdraw and hence leave the U.S. to “fight” (against whom, for what?) alone. Should, for instance, ther Germans begin so suffer casaulties, calls for immediate withdrawal would not be long.

    Merkel’s and Brown’s call yesterday fore a conference on Afghanistan before the end of the year is probably the first step in creating an exit for European troops.

    1. attempter

      If I were confident the results would be favorable, what I’d do is hold a plebiscite, and when a solid majority voted to bring the boys home, I could simply say to the “ally”, it’s force majeure, democracy has spoken. (That would also help provide any domestic political cover I might want.)

      It would be better to do that before the casualties started piling up, or some acute event like the Madrid bombings. Then it looks proactive. Otherwise, you look like you’re just giving up when the going gets tough, or like Spain that you’re caving in to terrorism.

      I might do something similar to justify a quick withdrawal from the entire imperialist war if I were president here in America. (Though the current poll figures, while getting better, still aren’t quite good enough.)

  4. Skippy

    Re: Afghanistan, no one can win there full stop. Not a bad place till world powers decided it was important enough to control.

    40 odd years of war has left the country in shambles and with out an end in sight. Now we have a corrupt drug influenced politic that at the first sign of trouble will flee back to what ever country’s they resided in before Americas influence allowed them back and with more wealth than they started with in the first place…shez.

    The West as a hole can shoulder much of the burden for the suffering created since WWI (victors spoils). I say back out and send what ever relief we can with out strings attached. They will at their own pace need to correct this intrusion into their lives and society. I say this with out regard with troops on the ground, we do not belong their in the first place and if things were reverse I’m sure we would be pushing back too with all available means.

    @RJS…that (Capitalism) and about every other thing that the west likes to lay came too have invented since the middle ages. The Persian physicians were aghast at the primitive state of Western medicine when they came in contact with it. We still use surgical tools invented by them to this day.

    Skippy…bring them home so they can have a life again. Some have realistically talked about 20 years over there in order to effect stability…anyone up for that drain upon us all.

  5. DownSouth

    Swedish Lex,

    Thanks for the link.

    I am intrigued by the ongoing controversy about economic liberalisation and how the leading protagonists have squared off: EU vs. US&UK. I am profoudly disappointed that both Brown and Obama have become little more than shills for the finance industry, and that they believe nothing more is required than a blowing up of yet another bubble.

    Underlying the grotesque notions of Brown and Obama, however, might be something more profound. I don’t know how closely their ideas are alligned with those of their constituents, but there is some evidence that on the learing curve the people of the UK and the US lag far behind those of the people of continental Europe. This can probably be attributed to the fact that a successful imperial enterprise for the US and UK is much closer in the rearview mirror than for any of the nations within continental Europe, including Russia. The buccanering spirit of a former hegemon is not easily dispelled. I just hope the learing experience doesn’t entail reliving the totalitarian nightmares that Europe and Russia went through during the 20th century.

    Nevertheless, I appreciate the information you bring to the table and enjoy your insights.

  6. chad

    “I say back out and send what ever relief we can with out strings attached.”

    It’s pretty well established that just sending aid to a country with no strings attached makes things worse. You have to be on the ground to effectively distribute it otherwise the aid goes to warlord’s armies or rots in a warehouse.

    I think you’re way more right than wrong but the tricky part of aid relief is not finding people to donate but the logistics of getting food/medicine into the bodies that need it.

  7. DownSouth

    @Swedish Lex

    Even though the EU is probably farther along the learning curve than the US&Uk, the following comments from your link (p. 14) nevertheless indicate just how far even the Europeans have to go:

    “…unless the Commission takes the initiative in helping to restructure an automotive sector suffering from overcapacity (owing not only to new competitors but also to rising oil prices and concerns about climate change), national intervention could severely damage the single market…”

    “The crisis risks significantly and permanently reducing the EU’s potential output. There is also a serious danger of a reduction in long-run potential growth rates, as the crisis is likely to result in a more restrictive financial regime less conducive to innovation. Together with weakening demographic conditions and the higher tax rates implied by the deterioration of public finances, such developments would turn Europe into a permanently low-growth area incapable of attracting, or even retaining, the most productive personnel and companies.”

    The cognitive dissonance that inheres in these remarks is mind boggling. It results from what Hannah Arendt called the “irrational faith of liberals in growth.” For while the authors acknowledge the end of abundant oil and the looming environmental constraints, there is no concomitant acknowledgment that these might be the death knell of unending progress, where progress is defined as growth.

    Regardless of whether one agrees with Arendt’s negative opinion of growth or not, I think all must agree she was an absolutely superb teacher. In “Crisis of the Republic” she traces how the notion of progress came about in the 17th century with the hommes de lettres, best represented by Pascal and Fontenelle, and evolved into the concept of “unending progress” in the 19th century. Then in “On Revolution” she traces how, through the materialistic philosophies of Aristotle, Adam Smith, Marx, Harrington, Rohan and others, progress came to be defined as growth. She notes how quickly the drive to escape poverty morphed into “the fatal passion for sudden riches.” The idea of equating growth with progress she calls one of the most pernicious modern doctrines to have ever derived from the tradition of Western thought.

    While Arendt, being very much a modernist and a child of the Enlightenment, does not throw the idea of progress overboard, she does nevertheless believe it will be necessary to redefine it as something other than growth–“the relentless process of more and more, bigger and bigger.” What that “something other” is she does not know, other than to indicate it will be something “altogether new and totally unexpected,” something that we don’t “already know.” However, she is quick to assert that if we continue down our current materialistic path, the result will be a loss of freedom, first by exchanging political or public freedom for private freedom and private happiness (the libertarian agenda), and then by the loss of private freedom as well.

    Reinhold Niebuhr comes to the same conclusion that Arendt does concerning the current state of human affairs, however Niebuhr believes man’s insatiable thirst for riches doesn’t result from some philosophical tradition, but is part of his nature. “The beast of prey ceases from its conquests when its maw is crammed,” he writes, “but man’s lusts are fed by his imagination, and he will not be satisfied until the universal objectives which the imagination envisages are attained. “ “In his sanest moments he sees his life fulfilled as an organic part of a harmonious whole,” he adds. “But he has few sane moments; for he is governed more by imagination than by reason and imagination is compounded of mind and impulse.”

    Niebuhr, unlike Arendt, holds out no hope for something “altogether new and totally unexpected” as the ultimate solution to one of mankind’s most intractable problems.

  8. VacantHomes

    Heh, there were some real howlers in the Google Books article… I especially enjoyed “The Mosaic Navigator: The essential guide to the Internet Interface”, dated 1939 and written by Sigmund Freud and Katherine Jones. Truly a prescient work, even for ol’ Sigmund.

  9. Swedish Lex


    Thanks for the comments and thanks for bringing Arendt into the discussion.

    First, the EU and the Member States have not only the automotive industry to worry about, I am afraid. The Bruegel paper provides a list of prblem areas and also an outline for an actions. From Bruegel and from official sources in the EU and in the Member States, it is however clear to me that not many stakeholders believe that it is realistic to simply go back to the old normal, i.e. get the banks to lever up and lend again and to get weak auto manufacturers to produce cars that people do not wish or cannot afford to buy.

    There is, in my view, a certain preparedness to take the discussion one step furhter, as inidcated in the Bruegel quote that I gave and thus dig into the question of markets and society at large. Environmental policy is increasingly playing into this also and the EU is putting and increased emphasis on trying to integrate environmental impact into policy-making, which may lead to lower but more sustainable economic growth. Not always successfully or even convincigly, but it is in that direction that matters seem to be moving.

    Hence the relevance to refer to Arendt as you did: “What that “something other” is she does not know, other than to indicate it will be something “altogether new and totally unexpected,” something that we don’t “already know.”

    In fact, Sarkozy has taken an interesting initiative to discover, or at least measure, “that something other”, as you put it, through the creation of the Commission on the Measurement of Economic Performance and Social Progress:

    A quote from one of the Commmission’s recent papers: “GDP shortcomings, as an index for measuring socio-economic progress, feature again prominently in the public debate, following years of benign neglect. Such criticisms are almost as old as the concept itself and national accountants have repeatedly warned about limitations of GDP as a welfare indicator. At the end of the day, it is essentially a measure of economic activity, and more specifically of economic activities leading to monetary transactions. As a result, GDP suffers from two major weaknesses: (a) being a monetary aggregate, it pays little or no attention to distributional issues and to elements of human activity or well-being for which no direct or indirect market valuation is available; (b) it is measuring productive flows and, as such, ignores the impact of productive activities on stocks, including stocks of natural resources.”

    The Commission has, as you may know, a couple of Nobel Prize winners on it, including Stiglitz. It is interesting that it was Sarkozy who took the initiative to create the Commission which thus is a French and not an EU initiatve. Sarkozy will of course seek to project any of the Commission’s findings that he may find suitable onto the EU and will not settle for only France. It will be interesting to monitor these development and the financial crisis provides a fertile ground for pitching new ideas.

    Personally I doubt that one should spend much time at all on finding the new holy grail that will be “totally unexpected” and reveal a new purpose for society. Sounds more like a sales pitch for the next totalitarian ideology, if you see what I mean. If we instead improve the way things currently are done, bit by bit, and avoid repeating the same mistakes (too often), a lot will have been gained. Like building the environmental cost that goods and services carry into their sales price in a way that is coherent, consistent and transparent.

  10. Skippy


    I have personally experienced the out comes of interference by do goodies in their rush to alleviate the suffering of others. In their rush to limit-expedite the problem they usually incur bigger problems down the road. Yes food and weapons are horded by the masters as a means of control, but not unlike a domestic, out side interference usually gets the help shot, killed or vilified. IMO technical help from a safe position is the best means, where in an arm length approach is used and their implantation of offered solutions puts the onus squarely on their shoulders.

    @DowenSouth-Swedish Lex,

    So much of what your saying is the crux of the hole So much yet to learn, yet tying not to befoul our world in the process or allow another tyrant to rise up in the confusion/chaos.

    The buccaneer-pioneer spirit aka *king of my castle* syndrome does become a problem when elbow room has run out, ask the Japanese-Chinese ancestors hay. The transformation will not be easy with generational condition via every tool in the shed thrown at the world by MSM, Academia, peer pressure by our very own family members or devises that help us to become accustomed to instant communication gratification with only the little down side of lower sperm counts/defective sperm or brain tumors. The only answered question is by which means will it happen, consensus or violence.

    Skippy…bloddy humans if it doesn’t kill you instantly its ok….radiated frequency (RF) on a C-130 Hercules UHF antenna keyed on the ground with pigeons roosting on it will result in feathery popcorn, where if slowly brought up in cycles will provide a tasty microwave meal of squab ala Hercules. I personally enjoy mine with a chalice of ethyl-methyl-ketone vintage Ashland chemicals 1986 *MSDS onsite*…bon appetite.

    PS. your holding a kiddie cupcake microwave oven near your reproductive organs or the most important organ of them all, good grief.

  11. Tim

    Yves, The “Meltdown Witnesses” Gallery/article at cnn money is an excellent link for tomorrow.
    (I’ve tried posting the link but my comment is rejected by your filter.)

    From the horses’ mouths about the Lehman Crisis. It’s amazing to see the amount of surprise and lack of culpability. Kashkari is the highlight to me.

  12. Skippy

    Re: Tims link via CNN *Meltdown Witnesses*

    What adroit hand washing with smiling mugshots glued to the benign *we tried, who would have thunk-it* petite commentary. Are these folks so detached from reality due to their altitude, self reinforced delusions ie: I’m financially successful because I’m right about it all, short term-ism on growth hormones (see professional athletes). Well as long as the brass ring remains acquiring, concentrating, consolidating ever increasing wealth at geometric rates for individual or corporate benefit as the only way to expand into ever increasingly tighter spaces (see this world) we will smash our collective heads upon frustrations edifice.

    The Fed may sell its debt, the Treasury might print it, but it looks like Wall ST is nothing more than a VAT/GST on us all. BTW when is someone going to tell the emperors that the vaults are EMPTY.

    Hay Ben your new moniker is the *candyman* link:

    Skippy…MSM has really out done it’s self this time, cognitive dissonance anyone. I’m going to go toss my cookies now…maybe that will rid me of this feeling.

  13. Hugh

    The Fuld article is bizarre. Fuld asserts that he has been slandered and misunderstood. He is angry that his firm wasn’t bailed out too. Nothing really on his running Lehman into the ground to the point that it needed massive government help to survive, or go splat as it did.

    I don’t know if the Reuters writer was trying to provide the “human” side or if the reporter was just being arch. But like so many in the financial meltdown we are talking about incredible self-entitlement, self-justification, and unremitting self-centeredness. Poor Fuld, he must suffer reduced as he is to only four estates. His wife doesn’t show up to buy multi-thousand dollar purses at trendy boutiques on a regular basis anymore. And horrors! he now flies commercial.

  14. DownSouth

    @Swedish Lex,

    Thanks for the link.

    I’m pleased to see that at least a few people are beginning to question the growth=good assumption.

  15. Skippy

    @Swedish Lex.

    I second DownSouth’s thanks and appreciate the free access to high end papers.

    Although I fear the resistance which change may necessitate by vested individuals or groups in their imagined reduction when confronted by perceived loss of personal toil/effort with in a construct.

    Skippy….keep up the effort and thanks for your time. I for one greatly appreciate it and applaud your efforts to proffer information.

  16. Clark

    Have you seen Taibbi’s latest rant ? On GS securitizing insurance policies? Some gonzo quotes like the “squid”.

    “This feels like financial innovation as practiced by Josef Mengele meets the Zucker Brothers; not just evil, but wacky evil. I don’t even want to think about what happens when Goldman Sachs suddenly has a large financial stake in the premature deaths of a bunch of old people.”

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