the rational post » world affairs

the spanish prisoner

The Editor — Thu, 11 Feb 2010 06:03:49 +0000

“Zapatero is not a good driver. It’s like a boat, which in calm waters steers fine, but when it gets bumpy, they are not prepared.” The same could be said for many of the world’s C-level leaders, so it’s perhaps not surprising that both companies and countries are finding out the hard way that credit can dry up when the sea gets choppy…

Not a bull in sight as the bears go after Spain
From the nosebleed seats of the E.U., government cries out ‘We are not Greece’

By Barbara Kollmeyer, MarketWatch

MADRID (MarketWatch) — Eduardo Fernandez Agudo is old enough to have lived through other economic crisis in Spain, but the current one has him worried enough.

“We are in a very difficult time. For people, for companies,…

one island, two worlds

The Editor — Tue, 02 Feb 2010 22:02:16 +0000

It isn’t surprising that so-called “ambulance economics” has gained mass policy appeal as the global economy descends into madness. The battlefield, after all, is no place for quiet research and careful study. But even the most pressing humanitarian disasters could use a little “clinical economics” to help decision-makers better chart out the way forward. Recent poverty relief efforts in Haiti, for instance, should certainly focus first on the bare essentials of sustenance, sanitation, and security. Once politicians and development professionals are able to stop the bleeding, however, the really critical work actually begins in terms of supporting the long-term prosperity of the country. In that spirit, any path forward should take into consideration the unique historical, geographic, cultural, and economic…

calculated terror

The Editor — Tue, 22 Dec 2009 04:27:01 +0000

In the 400+ years since the birth of modern statistics, data has been collected on everything from life expectancy and planetary motion to little league batting averages and micro-loans in rural Bangladesh. As technology catches up with the world’s desire to better predict the future and understand the past, applications have expanded to include dynamic models of the global economy and more recently the probability of a terrorist attack. The danger with relying on this methodology, of course, is that the same statistical biases that contributed to the recent financial chaos may cause more harm in the real world than they ever did on Wall Street…

Calculated Terror
How a computer model predicts the future in some of the world’s most volatile hotspots.
BY AARON MANNES, V.S. SUBRAHMANIAN in Foreign Policy

An…

war games

The Editor — Thu, 17 Dec 2009 03:35:35 +0000

Scores of advanced military technologies – from radio to the Internet to GPS – have successfully made the leap from combat central to electronics expo since the dawn of the industrial military complex. As game consoles grow ever more powerful and programmers continue to push the envelope of simulated reality, consumer electronics are returning the favor. At a fraction of the cost of custom hardware designed by established global defense contractors, networked PS3s and the benefit of retail economies of scale are being used for everything from high-tech imaging systems to simulating the behavior of nuclear weapons, blurring the line yet again between war and peace…

War games
Dec 10th 2009 From The Economist print edition

Consumer products and video-gaming technology are boosting the performance and reducing the…

i met the walrus

The Editor — Tue, 17 Mar 2009 01:28:41 +0000

“In 1969, a 14-year-old Beatle fanatic named Jerry Levitan, armed with a reel-to-reel tape deck, snuck into John Lennon’s hotel room in Toronto and convinced John to do an interview about peace. 38 years later, Jerry has produced a film about it. Using the original interview recording as the soundtrack, director Josh Raskin has woven a visual narrative which tenderly romances Lennon’s every word in a cascading flood of multipronged animation. Raskin marries the terrifyingly genius pen work of James Braithwaite with masterful digital illustration by Alex Kurina, resulting in a spell-binding vessel for Lennon’s boundless wit, and timeless message...”

strong arm of the lawmakers

The Editor — Fri, 13 Feb 2009 18:48:38 +0000

Few economists now doubt that private household spending and corporate investment will rescue the economy on their own. The debate now lies in the scale and scope of the government’s intervention, as the only institution with the access to capital, macroeconomic scope, and investment horizon needed to jump-start the labor market, keep production cycles from seizing up, and create the necessary conditions for manageable lending and spending to resume.

In the following commentary, David Kotok of Cumberland Advisors suggests that any stimulus of this size shouldn’t be rushed or it risks not achieving the plan’s most basic objectives: immediate job creation and demand stabilization. While fiscal conservatives and liberals argue over the relative effects of tax breaks versus direct spending, the debate…

the forever war

The Editor — Mon, 05 Jan 2009 17:35:32 +0000

If there’s any doubt remaining among global power-brokers that short-term foreign policy objectives are fundamentally flawed, recent events in the Levant have provided ample evidence. Such tribal conflict has played out in the Garden of Eden since northern Neanderthals and southern proto-human colonies first crossed paths during the last major Ice Age. Since that time, control over the region has changed hands a number of times, from Semetic tribes to Egyptian pharaohs to Roman Catholics to Muslim traders to Christian crusaders to Muslim Turks, and so forth. For every fence that was built and every line that was drawn, rivals always built a bigger ladder or dug a deeper tunnel. And so the feud was passed from generation to generation,…

the 44th president

The Editor — Wed, 05 Nov 2008 15:48:40 +0000

While the world comes to terms with yesterday’s historic call for change, Nouriel Roubini and his team have pulled together a laundry list of the many great challenges that lie ahead…

Barack Obama, the 44th President of the United States
RGE Monitor

The 2008 U.S. Presidential election was historic itself owing to the candidates’ profile. But the timing of the elections as the U.S. and global economy are in the midst of the worst financial crisis and recession in decades reminds us of the Great Depression era and the 1980s recession when incoming Presidents Roosevelt and Reagan faced immense challenges to cure the economy’s woes.

By the time Obama takes his oath in January 2009, he will face an economy which is still in a…

the great black north

The Editor — Fri, 03 Oct 2008 05:05:07 +0000

As Canadians flock to the polls later this month, quietly supplying 22% of America’s oil and 13% of its natural gas, its neighbours to the south have barely noticed. Cross-border oil flows are inevitable – given that America controls of a mere 2% of the world’s reserves and consumes almost 25% of supply – and securing its long-term petroleum assumes the full participation of Alberta’s carbon-rich tar sands and the off-shore bounty at Hibernia. Even Governor Palin’s Wildlife Reserve is virtually useless without passage by pipe across Canada’s Western provinces. Given the importance of “Securing America’s Energy Future” during a twin election year, it’s surprising that talk hasn’t returned to NAFTA, cleaner energy, or agricultural subsidies. Then again, maybe it isn’t…

Canada’s role missed in…

speculations on an oil tariff

The Editor — Tue, 25 Mar 2008 17:36:14 +0000

Assuming that the United States decides to impose a $25 per barrel tariff on all imported oil (crude and product) – and Canada and Mexico were not exempt — let’s explore how this might affect:

a. The volume of oil imported into the United States?

Volume responses to a $25 tariff would vary over time. In the near-term, there would only be a negligible decrease in the volume of oil imported (given a low short-run elasticity of energy demand) as industries, supply chains, and consumers remain highly dependent on existing petroleum infrastructure. The redistribution of the tariff (with tax reductions) would partially offset the incremental cost to businesses and consumers, but the policy is unlikely to completely offset the macroeconomic effects of a…

question 3

The Editor — Fri, 29 Feb 2008 04:56:11 +0000

An excerpt from the mid-term “problem set” in ENR-302…

3. The country of Xanadu is dependent of the use of domestically produced methanol for 100% of its energy needs. The price of methanol is set by a competitive market and the fuel is priced at $2.50 per gallon. Two large companies supply 80% of the market and each has costs of $1.50 per gallon. The opposition party and most of the national labor unions argue that these two companies are making obscene profits. They demand that the President place a mandatory price cap of $2.00 on the price of methanol to prevent “this abuse of market power.”

Assume that the elasticity of demand is 0.4 and the elasticity of supply is 0.8.…

the geopolitics of dope

The Editor — Sat, 02 Feb 2008 02:03:07 +0000

Another interesting analysis on the trade-off between economics and security. In this case, the existence of a low-cost, high-value, recreational good with addictive/inelastic demand has produced a covert, vertically integrated, structurally dynamic supply chain in northern Mexico. Stopping it would be akin to damming a river with a cheese cloth. Without a considerable increase in legal supply, a decrease in illegal demand, or ideally both, there’s little chance that the industry will dry up any time soon. More likely, as the author suggests, “The children and grandchildren of the Zetas will be running banks, running for president, building art museums and telling amusing anecdotes about how grandpa made his money running blow into Nuevo Laredo.” Sounds like the Bronfman affair all…

private risk, public reward

The Editor — Fri, 18 Jan 2008 11:49:01 +0000

An expanded look at the role corporations and hospitable business environments have played in stabilizing the anarchic system of international relations. This work is based on an earlier paper which focused on the rise of the corporation as a key variable in the calculus of global peace and security…

Private Risk, Public Reward:
Stabilizing Frameworks and the Rise of Corporate Hegemony
By Devin DeCiantis | ISP-351 | Economics & Security

“The modern corporation as an institution is entitled to much more respect than it has frequently received.
It is, in fact, an institution at a cross-road in history,
Capable of becoming one of the master tools of society – capable also of surprising abuse.”
- Adolph Berle, Jr. The Twentieth Century Capitalist Revolution, 1954

Traditional theories about power structures…

factors of destruction

The Editor — Wed, 16 Jan 2008 20:31:20 +0000

In this recent Times OpEd, Rochester economics professor Steve Landsburg points out how easily John Q. Public overlooks cause and effect in 21st century markets.

Let’s review: 1) goods and services require labor and capital to produce; 2) the price of labor and capital impact an item’s ultimate price; 3) factors of production are much less expensive in the developing world; 4) a decades-long public war on inflation in the developed world has prevented the price of goods from increasing in step with wages; however, 5) wage growth is now slowing and inflation has reached a 17-year high; thus 6) in their quest to find the lowest price, consumers who rebel against off-shoring jobs are simply biting the hand that feeds them,…

the rise of global corporations

The Editor — Wed, 12 Dec 2007 20:04:20 +0000

This paper was written for quite possibly the best combination of professor and class I’ve ever experienced. If only all academic endeavor challenged so profoundly, surveyed so broadly, and bore as much intellectual fruit…

Hegemonic Stability and the Rise of Global Corporations
by Devin DeCiantis

“The logic of markets is borderless,
but the logic of politics remains bounded.”
- Louis W. Pauley, Who Elected the Bankers? Surveillance and Control in the World Economy, 1997

Traditional theories about power structures have focused on the role of states as principal agents in international affairs. In aggregate, these theories justify most of the major geopolitical incidents that have shaped the modern world order, but none of them effectively do so on their own. That’s not to suggest that existing theories based…