Contra Krugman on China’s Renminbi Exchange Rate Policy

Renminbi_banknotes Yiping Huang in Vox:

Most economists would agree with Krugman that the renminbi is probably undervalued. But the extent of misalignment remains a controversial subject. For instance, applying a purchasing power parity approach, Menzie Chinn of University of Wisconsin at Madison and his collaborators estimated an undervaluation of about 40%. But after the World Bank’s 40% downward revision of Chinese GDP in PPP terms, that undervaluation disappeared completely. Nick Lardy and Morris Goldstein of the Peterson Institute of International Economics suggested that the renminbi was probably only undervalued by 12-16% at the end of 2008. My colleague Yang Yao and his collaborator at the Peking University found even less misalignment.

The renminbi exchange rate is but one, and perhaps not even the most important, factor behind China’s large trade and current account surpluses. Among other factors, economic studies have attributed the recent surge in China’s external imbalances to the unique population dividend and the relocation of industries from other Asian economies. My own research has also highlighted the importance of distortions in domestic factor markets, which were largely legacies of the pre-reform economic systems of central planning.

To resolve the global imbalance problem, China, the US, and other countries will need to work together and adopt more comprehensive reform packages, focusing not only on the exchange rate regime but also on domestic structural reforms in their respective countries. Exclusive focus on the renminbi exchange rate issue is likely to be both ineffective and counter-productive. Between mid-2005 and mid-2008, the renminbi appreciated by 22% against the dollar and by 16% in real effective terms. But China’s external imbalances continued to widen rapidly.

The US started to lose manufacturing jobs way before China emerged as a global manufacturing centre. China’s current account surplus increased after 2004. But America’s current account deficits mushroomed from around the turn of the century. There is no denying that China and the US should work together to resolve the imbalance problem. But to say that China’s surplus caused America’s deficits, which emerged much earlier, is simply at odds with common sense.

So what would happen were the Obama administration to follow Krugman’s advice?

An Interview with Péter Esterházy

EsterhazyIn The Millions:

The Millions: Your acrobatic sentences may remind contemporary American readers of Donald Barthelme, or even of Diane Williams, but I’m guessing that when you turned to novel-writing during the Kádár era, such linguistic self-consciousness was sui generis. Can you tell us a bit about how your style developed, and how it fit into the social, political, and aesthetic climate of Budapest in the ’70s?

Péter Esterházy: My admittedly conscious use of language, I think, was not conscious. It was my hand or my stomach that knew. In short, I didn’t approach writing from the vantage point of theory, but from the side of practice – much like a stonemason. A stonemason is brick-centered, too. At the time this was considered marginal, but at the time marginality seemed the natural state of being. The center is suspect. Everything that is official is suspect. Except, in essence, it’s basically the official that exists. This is what we call a dictatorship.

TM: Did you feel yourself to be part of a broader movement of younger writers or artists, or did you have a sense of doing something quite radical? And how did your academic training as a mathematician inform your approach to fiction?

PE: I think that as far as my reflexes are concerned I would have liked to have been a so-called l’art pour l’art writer. But in a dictatorship everything takes on political coloring, and though a writer may declare, or rather practice, that a text is a text is a text (and a rose), still all this ends up in a pronounced moral sphere, it takes on social function; in fact, whether the writer intends it or not, that’s the role it plays. But that’s all right. It is what happened to my books as well.

At first I noticed similar aspirations among contemporary poets (Dezső Tandori, Imre Oravecz). Clearly, the same thing comes off as a sort of radicalism in prose. But my temperament is less radical than it is consistent.

Corpus Coranicum

IdeasKoran__1269621106_5297

Later this spring, a team of scholars at Germany’s Berlin-Brandenberg Academy of Sciences will complete the first phase of what will ultimately be an unprecedented, two-decade effort to throw light on the origins of the Koran. The project, called the Corpus Coranicum, will be something that scholars of the Koran have long yearned for: a central repository of imagery, information, and analysis about the Muslim holy book. Modern research into Islam’s origin and early years has been hampered by the paucity and inaccessibility of ancient texts, and the reluctance of Muslim governments in places like Yemen to allow wide access to them. But, drawing on some of the earliest Korans in existence — codices found in Istanbul, Cairo, Paris, and Morocco — the Corpus Coranicum will allow users to study for themselves images of thousands of pages of early Korans, texts that differ in small but potentially telling ways from the modern standard version. The project will also link passages in the text to analogous ones in the New Testament and Hebrew Bible, and offer an exhaustive critical commentary on the Koran’s language, structure, themes, and roots. The project’s creators are calling it the world’s first “critical edition” of the Koran, a resource that gathers historical evidence and scholarly literature into one searchable, cross-referenced whole.

more from Drake Bennett at The Boston Globe here.

Tuesday Poem

Ballad

forgive me if i laugh
you are so sure of love
you are so young
and i too old to learn of love.

the rain exploding
in the air is love
the grass excreting her
green wax is love
and stones remembering
past steps is love,
but you. you are too young
for love
and i too old.

once. what does it matter
when or who, i knew
of love.
i fixed my body
under his and went
to sleep in love
all trace of me
was wiped away

forgive me if I smile
young heiress of a naked dream
you are so young
and i too old to learn of love.

by Sonia Sanchez

Apoca-lit Now

Sameer Rahim in The Telegraph:

Bookssumm_1604421c This weekend, a sad scene is playing itself out on a busy west London high street. The Kilburn Bookshop, which has served readers for 30 years, is closing its doors for the last time. Many factors are involved – the recession and rent increases among them – but the bookshop’s manager, Simon-Peter Trimarco, believes there are deeper reasons for the closure. One problem is that browsers now rarely put their hand in their pocket. “Only one in 10 customers will end up buying a book.” They find what they want and then go to Tesco or Amazon where there are heavy discounts. (There is even an iPhone app that lets you scan a book’s bar code and find the cheapest price.) The Kilburn Bookshop is friendly and has something of a literary pedigree: “Zadie Smith came in as a little girl,” Trimarco says. If this shop can’t survive, then which can? Very few, it seems. Last year, one in 10 independent bookshops closed, at a rate of three a week. “I’m despairing,” Trimarco says.

The death of independent bookshops is just one symptom of a much wider crisis in publishing. Discounted books, online bookselling and the advent of ebooks are destroying old patterns of reading and book buying. We are living through a revolution as enormous as the one created by Gutenberg’s printing press – and authors and publishers are terrified they will become as outdated as the monks who copied out manuscripts. How this happened is down to ambitious editors, greedy agents, demanding writers and big businesses with an eye for easy profit. Combine that with devilishly fast technological innovation and you have a story as astonishing as the credit crunch – and potentially as destructive.

More here.

No Matter What, We Pay for Others’ Bad Habits

Sandeep Jauhar in The New York Times:

Habits “I’m tired of paying for everyone else’s stupidity,” is a comment I read on the Internet last week after the health care bill was passed. It summed up the views of many Americans worried about shelling out higher premiums and taxes to cover the uninsured. Why should we pick up the tab when so much disease in our country stems from unhealthy behavior like smoking and overeating?

In fact, the majority of Americans say it is fair to ask people with unhealthy lifestyles to pay more for health insurance. We believe in the concept of personal responsibility. You hear it in doctors’ lounges and in coffee shops, among the white collar and blue collar alike. Even President Obama has said, “We’ve got to have the American people doing something about their own care.” But personal responsibility is a complex notion, especially when it comes to health. Individual choices always take place within a broader, messy context. When people advocate the need for personal accountability, they presuppose more control over health and sickness than really exists.

More here.

Joothan: A Dalit’s Life

By Namit Arora

A review of a memoir by an ‘untouchable’ starting in the 1950s in rural Uttar Pradesh, India.

(This review won the top award in the 3 Quarks Daily 2011 Arts & Literature Contest. Read more about it here.)

JoothanIndia I grew up in the central Indian city of Gwalior until I left home for college. This was the 70s and 80s. My father worked as a textile engineer in a company town owned by the Birla Group, where we lived in a middle class residential quarter for the professional staff and their families. Our 3-BR house had a small front lawn and a vegetable patch behind. Domestic helpers, such as a washerwoman and a dishwashing woman, entered our house via the front door—all except one, who came in via the rear door. This was the latrine cleaning woman, or her husband at times. As in most traditional homes, our squat toilet was near the rear door, across an open courtyard. She also brought along a couple of scrawny kids, who waited by the vegetable patch while their mother worked.

My mother often gave them dinner leftovers, and sometimes tea. But unlike other domestic helpers, they were not served in our utensils, nor did the latrine cleaners expect to be. They brought their own utensils and placed them on the floor; my mother served them while they stood apart. When my mother turned away, they quietly picked up the food and left. To my young eyes this seemed like the natural order of things. These were the mehtars, among the lowest of the so-called ‘untouchables’. They worked all around us, yet were ‘invisible’ to me, as if part of the stage props. I neither gave them much thought during my school years, nor recognized my prejudices as such. I, and the kids in my circle, even used ‘untouchable’ caste names as playful epithets, calling each other chamaar and bhangi.

It’s possible that I first reflected on the idea of untouchability only in college, through art house cinema. Even so, upper-caste Indian liberals made these films and it was their viewpoint I saw. It is hardly a stretch to say that the way even the most sensitive white liberals in the United States knew and described the experience of black Americans is partly why one had to read Frederick Douglass, Zora Neale Hurston, Ralph Ellison, Richard Wright, James Baldwin, and other black authors. A similar parallel holds for Native Americans, immigrants, and women, as well as the ‘untouchables,’ now called Dalits (‘the oppressed’), numbering one out of six Indians. For some years now, they have been telling their own stories, bearing witness to their slice of life in India. Theirs is not only a powerful new current of Indian literature, it is also a major site of resistance and revolt.

Read more »

A Dialogue on the Death Penalty

Gerald Dworkin and Justin E. H. Smith

FrenchGuillotine Jerry and I began this dialogue after he, in the process of preparing an ethics course on the topic of capital punishment, happened upon some pieces I wrote a few years ago at various activist venues (they are archived here, here, here, here, and here). The articles are polemical rather than scholarly, and I never expected the issue of capital punishment would someday get any attention from me qua philosopher (as opposed to qua polemicist). But Jerry found some of the issues I raised in them worthy of attention, and in turn has raised for me a number of issues that I never really worked through before in my very visceral opposition to the death penalty. I'm grateful for this, and I think what has resulted is a discussion that should be of interest to reformers and philosophers alike (as well as to those who belong in both of these camps.) –JEHS.

*

Gerald Dworkin: Justin and I agree that capital punishment as currently administered in the United States, and in the absence of convincing evidence that it deters more than a sentence of life imprisonment without possibility of parole (LIWP) for any crime, should be abolished. Where we may disagree –I put it this way because I am not sure what view I will emerge with at the end of this discussion– is whether there is an argument for abolition that does not depend on contingent facts, such as that it does not deter, or that as currently administered the selection of who gets executed is both arbitrary (chance and luck play an enormous role) and unjust (the poor and racial minorities are executed at higher rates that those with money and those blacks who kill whites). For, as Justin points out elsewhere, believing that the facts are as they are is compatible with believing that in a world where deterrence is established and fairness reigns CP is justifiable. This position could be true even if one believed that as a matter of contingent fact our system will never be sufficiently just, and the evidence for deterrence will never be sufficiently strong so as to warrant CP. The first thing I want to do is see if Justin and I agree on a more rigorous definition of the issue. For it is, as I shall argue later, very important exactly how the problem is framed.

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Spilling Ink on Africa’s Fires

By Tolu Ogunlesi

KSM

Every time I find myself at Lagos’ Murtala Mohammed International Airport, a glance at the foreigners’ queue makes me wonder how many of those sweating Caucasians are there on a mission to spill ink on Africa’s endless fires.

It is of course an open secret that the continent teems with ‘anonymous’ white men and women destined to build enviable reputations from material from the ruins of what the Economist Magazine once proudly termed “The Hopeless Continent”. In recent months I have become deeply fascinated by the possibilities of assembling images of Africa as painted by outsiders – the Gospel of Africa according to Saints Blixen, Kapuściński, Forsyth, Dowden, Maier, Wrong; to mention just a few.

“For the last 20 years the news from Africa has been unremittingly bad,” the second line of Anthony Daniels’ essay Not as black as it’s painted, (originally published in The Spectator) declares.

Daniels is to a significant extent correct. This was 1987. Twenty years before then would have been 1967, the year that the Nigerian Civil War kicked off. In those two decades Nigeria, self-acclaimed Giant of Africa, saw 30 months of civil war, four coup d’états, and one horribly mismanaged oil boom.

But he soon strays into dubious territory, adopting that deadly attitude (a potent mix of condescension and incontrovertibility) that the colonial adventure seemed to implant deep into the European DNA. A few sentences later, after a litany of peculiarly African woes – desertification, population explosion, AIDS – Daniels jokes: “Perhaps most depressing of all, one is now grateful for a President who, however dictatorial, does not actually eat his opponents.”

And then the guns emerge, blazing. Four examples:

“As I remarked, no doubt cruelly, to several young African radicals, even if Africa were to unite economically, it would still scarcely amount to Switzerland.”

“Africa is so technically backward that it would be cheaper to ship things from Mars than to produce them on the continent. An arms embargo on South Africa has produced an arms industry; an arms embargo on the rest of Africa would produce bows and arrows.”

“There is little in traditional African culture that is compatible with a modern economy, and much that is inimical to it.”

“Very few Africans have – can have – the faintest notion of the depth of the cultural and scientific tradition necessary to produce a Mercedes, or even a simple light bulb.”

Read more »

Ignoring the mainstream, spreading enthusiasm for difficult music and sustaining sonic subcultures: Colin Marshall talks to Chris Bohn, editor of The Wire

Chris Bohn is the editor of London-based monthly music magazine The Wire. Subtitled “Adventures in Modern Music”, the magazine has covered the alternative, the underground, the experimental, the avant-garde and the generally non-mainstream since 1982, featuring a span of artists from Ornette Coleman to Björk to David Sylvian to Jim O’Rourke to field recordists like Lee Patterson to emerging Chinese sounds artists like Yun Jun. The magazine is also well known as a rarity in its industry for both its profitability and its loyal, growing readership. Colin Marshall originally conducted this conversation on the public radio program and podcast The Marketplace of Ideas. [MP3] [iTunes link]

Wire1 I was reading a slightly older profile of the magazine in the Telegraph. It had a quote from you saying that The Wire is best thought of as a magazine that does not cover certain types of music rather than a magazine that does cover certain types. So I'll put the question to you: what does The Wire not cover?

The stuff you could consider heavily featured in the mainstream media. Obviously there's some crossover with the mainstream media and the underground, noncommercial media, but generally we have no interest in covering stuff you just see on — if you go to a newsstand any see a range of magazines, be it music, culture, fashion, whatever, you see certain names cropping up over and over again. We just have absolutely no interest in being part of that interchangeability of faces, names, et cetera, et cetera. We'd rather focus on the music that interests us, and that most frequently is “non-mainstream” music, “underground” music, whatever that means.

That's kind of a very slippery word, you might say, because “underground” in a political sense is a whole lot different from “underground” in a Western sense. In London or, I should imagine, where you come from, almost anything goes. You can do anything without consequences. But last November I was in Leipzig for a festival of underground culture from the German Democratic Republic period, the communist period in East Germany that obtained between '48 and 1989 before the wall came down. Then, underground culture had a totally different meaning. It's a salutary reminder to know that sometimes music is as serious as your life, and you can end up in jail for playing it. That's not often he case here. Every so often I have to take one step back from the word “underground” and remind myself that it can be a far different thing to what perceive.
Read more »

My Life As A Crime Fighter: Absolute Prosecutorial Discretion – Part 1

My Life As A Crime Fighter: Absolute Prosecutorial Discretion – Part 1

Norman Costa

Note: This narrative was created from three true stories. Each character is a combination of more than one real person. I changed names and story elements to preserve the privacy of individuals.

Prisoners_orange_jump_suits

Call in your troubles

My nephew, Samuel, called me from his home in Huntsville, Alabama at eight o'clock in the morning, an unusual hour for him to phone. I stayed quiet and waited. After a moment or two he spoke. He was hesitant and uncomfortable, asking if he could borrow $550. I gave an immediate assurance that I would lend him the money, and then waited.

“Uncle Norman, I got arrested for domestic violence.”

“WHAT!”

It made no sense, at all. In a more subdued voice, I asked him to tell me what happened. He said that he had pushed his wife, Kara, and she had fallen over a chair. He said it was an accident; he didn't mean to do it; but, it was his fault since he pushed her. Samuel was going to plead guilty to a criminal offense, agree to probation and anger management counseling, and pay a fine of $550. After twelve months his record would be wiped clean, if there were no more incidents.

And then Samuel started to cry. Inside a few seconds he was sobbing.

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Fashion as a Metaphor

Aditya Dev Sood

Payal jain monk Your correspondent has wrangled a place in the first elevated row, just behind the backless futons reserved for buyers. The Three Quarks Daily seat is adjacent to the New Indian Express (Calcutta) and The Man (monthly). Black bleachers cascade all along on either side of the runway. There are bells suspended above one end, just above the backboard with Payal Jain's name on it. On the other end, the jostling mosh-pit of camera men in five, no six layers, like the green toy soldiers that you may remember from childhood: sniper flat on the ground, aiming and firing on one knee, mortar loader, aiming while standing, platoon leader yelling.

The lights go brighter for a moment before dimming, the music starts thumping, a thrill ripples through us all, and four models appear on the far end of the catwalk. Your correspondent has never been so aware of the dramatic tension between camera, focal length, object and field. The contemporary, globalizing fashion show, of course, is a media practice, which requires the collaboration and participation of so many players to create this sense of the new, the now, the it, which one can either be with, or else clueless about.

Payal's models are wearing hoodies and head-scarves of many designs, and occasionally smocks that look also like Iranian chadors. Her literature says that the collection is inspired by the monastaries of Laos, which God love her, is surely exotic territory for all of us. The music is vaguely Enigma, perhaps remixed by Laotian monks.

Read more »

Antinomies (not really) of Molecular Gastronomy: Industrial Processes as the New High Skill, Craft Cuisine

CryovacErica Westly in IEEE Spectrum:

The term molecular gastronomy conjures up images of strangely colored droplets and foams arranged on a plate. As a result, this scientific approach to cooking is often derided as cold and unfeeling—the opposite of what good food is supposed to be. At its heart, though, molecular gastronomy—or, as it’s sometimes called, molecular cooking—involves using technological tools to create dishes that are delicious as well as innovative. One of the genre’s best tricks is applying seemingly mundane technologies from the food-processing industry to high-end ingredients like oysters and lobster. As the following five examples illustrate—three of which premiered in February at the prestigious Flemish Primitives culinary festival, in Belgium—the resulting techniques stand to benefit restaurant chefs and even home cooks.

1. At this year’s Flemish Primitives, Bernard Lahousse, a food consultant with a bioengineering degree, used a high-pressure processing (HPP) machine to infuse oysters with tomato and other flavors without sacrificing freshness or textural integrity. This marked the first time an HPP machine was used for culinary purposes, but the technology is a staple of the seafood-processing industry, which started employing the technology to extract meat from shellfish in the late 1990s. At US $500 000 to $2.5 million, HPP machines are too expensive for most restaurant kitchens, but chefs have been known to create tabletop versions of industrial equipment. Take, for example, the Reveo meat tumbler, a miniature version of an industrial meat tenderizer that retails for about $170.

The Tenure Tracts

Tenuretracts_calmag Cathleen McCarthy profiles some academic bloggers, including Brad DeLong, Dan Drezner, John Holbo and Cosma Shalizi, in California Magazine (via bookforum):

Whether blogs are bringing anyone closer to the truth, Holbo’s not sure. “People aren’t nearly as blunt in academic writing as they often are in the blog space. Even so, when academics argue with other academics on a blog, it’s generally pretty well-mannered—sarcastic, but well- mannered,” he says.

Cosma Shalizi ’93 is a case in point. Of all the blogs that brainiacs love to love, Shalizi’s The Three-Toed Sloth is one of the most esoteric. His undergraduate degree from Berkeley is in physics and he is now an assistant professor in statistics at Carnegie Mellon University. Bloggers from every discipline comment on his posts despite the fact that, if you have no statistics training, they read like a foreign language. His posts are sporadic, well researched, and loaded with a scientist’s idea of tongue-in-cheek humor. Just one can effectively eviscerate the latest popular theory.

If there’s one thing Shalizi can’t stand, it’s misinformation bandied about in the name of science. “A lot of the time, when I’m motivated enough to post something, it’s because I think someone is ‘being wrong on the Internet,’ as the saying goes—and this cannot stand,” Shalizi says. “It’s usually something I’ve read more than once and it seems such a pack of lies, or utter misunderstandings, that I feel like writing something. I wish I wasn’t so destructively motivated, but I am.”

When asked how much time and effort that takes, he says, “Quite a bit, to be honest. Part of that is the fact that I’m way over trained as an academic, and part is also wanting to leave people no excuse or way out,” Shalizi says. “If I can show that they’re just totally wrong, thoroughly wrong, then I will try to do that.”

“Of all the things I’ve written about, IQ and Wolfram got the most reaction,” he says, referring to his dissection of Stephen Wolfram’s best-selling A New Kind of Science, and to a series of posts in 2007 debunking the theory of IQ—particularly “the statistical myth” of g, or general factor of intelligence. “I wouldn’t say Wolfram is lying as much as utterly self-deluded. The IQ people I do think are lying.”

Shalizi rebutted Wolfram’s book in a post titled “A Rare Blend of Monster Raving Egomania and Utter Batshit Insanity.” He opens with “It is my considered, professional opinion that A New Kind of Science shows that Wolfram has become a crank in the classic mold, which is a shame, since he’s a really bright man, and once upon a time did some good math ….”

Iceland: the World’s Most Feminist Country

Icelands-Prime-Minister-J-001Julie Bindel in The Guardian:

Iceland is fast becoming a world-leader in feminism. A country with a tiny population of 320,000, it is on the brink of achieving what many considered to be impossible: closing down its sex industry.

While activists in Britain battle on in an attempt to regulate lapdance clubs – the number of which has been growing at an alarming rate during the last decade – Iceland has passed a law that will result in every strip club in the country being shut down. And forget hiring a topless waitress in an attempt to get around the bar: the law, which was passed with no votes against and only two abstentions, will make it illegal for any business to profit from the nudity of its employees.

Even more impressive: the Nordic state is the first country in the world to ban stripping and lapdancing for feminist, rather than religious, reasons. Kolbrún Halldórsdóttir, the politician who first proposed the ban, firmly told the national press on Wednesday: “It is not acceptable that women or people in general are a product to be sold.” When I asked her if she thinks Iceland has become the greatest feminist country in the world, she replied: “It is certainly up there. Mainly as a result of the feminist groups putting pressure on parliamentarians. These women work 24 hours a day, seven days a week with their campaigns and it eventually filters down to all of society.”

The news is a real boost to feminists around the world, showing us that when an entire country unites behind an idea anything can happen. And it is bound to give a shot in the arm to the feminist campaign in the UK against an industry that is both a cause and a consequence of gaping inequality between men and women.

According to Icelandic police, 100 foreign women travel to the country annually to work in strip clubs. It is unclear whether the women are trafficked, but feminists say it is telling that as the stripping industry has grown, the number of Icelandic women wishing to work in it has not. Supporters of the bill say that some of the clubs are a front for prostitution – and that many of the women work there because of drug abuse and poverty rather than free choice. I have visited a strip club in Reykjavik and observed the women. None of them looked happy in their work.

So how has Iceland managed it?