We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.
Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]
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Bloomberg carries this article today about the willingness of China to go on holding Western debt that might deteriorate in value:
China, the U.S. government’s largest creditor, is “worried” about its holdings of Treasuries and wants assurances that the investment is safe, Premier Wen Jiabao said.
“We have lent a huge amount of money to the United States,” Wen said at a press briefing in Beijing today after the annual meeting of the legislature. “I request the U.S. to maintain its good credit, to honor its promises and to guarantee the safety of China’s assets.”
Good luck with that. As Brian Micklethwait noted the other day, the fact that the US, or indeed the UK, might be downgraded in credit terms as nations or even default on certain debts, is no longer unthinkable. Defaults are not just things that happen in Ecuador, Russia, or competelyfuckedupistan. They can happen in the supposedly rock-solid financial centres of the world.
As Glenn Reynolds says sarcastically of the new US government of Mr Obama, the country is in the best possible hands.
Following from my previous article about the alleged size of the role played by China/Asia in the current financial troubles, an eagle-eyed commenter by the name of Marc Sheffner pointed this excellent article out which clarifies a lot. My thanks to Mr Sheffner.
God but I love the internet.
Following on from this, is another theme that came out of that seminar with media/City luminaries I went to the other day. One point that Anthony Hilton mentioned was the “global imbalance” issue. This is all about how the West, which is in net terms, up to its eyes in debt, has been living high on the hog thanks to oodles of surplus savings generated by countries such as China and Japan. In looking to figure out how to play the “global financial crisis blame game”, one argument goes like this: China, with its cheap exports, kept cheap by its artificially low and fixed exchange rate, earned huge amounts of money by selling this stuff to the West; in turn, the Chinese needed to reinvest the proceeds – there would be no point earning money you cannot spend – and they reinvested those proceeds in things like US government securities. As a result, long-term bond yields in the US fell, which enabled Mr and Mrs Westerner to renegotiate their long-term mortgages, release equity from their homes, and spend even more of their inflated wealth on – yes you guessed it – Chinese consumer goods. Result: a whacking great housing and consumer spending boom that inevitably crashed.
This argument sounds quite convincing. If it is true, then it also suggests that, contrary to what some of the critics of the Fed or other central banks might say, that there is not much that someone like Alan Greenspan could have actually done to curb domestic US monetary growth if there were such enormous inflows of hot money coming into the country’s debt markets from abroad. Well up to a point, Lord Copper. Much depends, I think, on what proportion of monetary growth in the West was driven by Asian inflows, and what was basically driven by domestic factors. I haven’t seen a lot of commentary on this.
If you buy the “Asian connection” argument, a problem, it seems to me, is that it would not have been realistic, for various reasons, for the US to have tried to curb these supposedly dangerous inflows of Asian money by protectionist measures such as capital controls or exchange controls. If one believes that capital and trade flows are good things, then imposing such controls would and could cause more damage than it solved. Exposure to capital flows has, in many ways, driven beneficial economic change.
But the argument about Asian money does suggest that had the Fed, etc, raised rates to curb inflationary pressures, all that would have achieved would have been to suck in even more Asian money from investors seeking a higher yield. But presumably, with higher rates, it would have curbed, and did eventually curb, US consumer spending, and hence dent the demand for Chinese and other non-US goods. China is now starting to feel the effects of the global slowdown rather sharply.
Even so, the “global imbalance” argument highlights the fact that in a world of fiat money without capital controls, it is now very hard for state central banks, even those with powers as wide as the Fed or the European Central Bank, to set interest rates effectively. Of course, the idea of a central bank setting rates for a complex economy is itself a version of state central planning. Globalisation has exposed its limitations.
One of the things I really want to ask Kevin Dowd at his Libertarian Alliance Chris R. Tame memorial lecture next week is how this sort of issue can be addressed. The “Asian dimension” to our current predicament could be the proverbial big gorilla in the living room. Or maybe it is just a small and rather distracting rodent.
The following article was written for us by Taylor Dinerman, a journalist whom we occasionally borrow from the WSJ. – Ed.
Last night, a sold out crowd at the Asia Society on Park Ave and 70th Street on Manhattan’s East Side came to hear Salman Rushdie, Sukutu Mehta and Mira Kamdar speak about the Attacks on Bombay. The obvious echoes of 9/11, and the large Indian and Jewish communities in New York ensured a big turnout.
While Kamdar, an unimaginative, left wing intellectual who had lost a cousin in the attack on the Oberoi hotel and Mehta, an Associate Professor of Journalism at NYU and the author of a book on Bombay, ‘Maximum City’ shared the stage, Salman Rushdie was obviously the main attraction. He did not let his audience down.
He began by rejecting, with utter disdain, the word ‘Mumbai’. He said it was nothing but the product of a politician’s grab for power. Indeed one of the themes of the evening was the inadequacy of the Indian state as compared to the nimbleness and effectiveness of the Indian private sector. This is ironic since the almost entirely liberal crowd seems to have no problem with President-elect Obama’s plan to vastly increase US state power and to do unspeakable things to the ‘capitalists’, car owners and other evildoers, in order to save the planet.
Rushdie and the others, sang (metaphorically) hymns of praise to the vibrant, diverse, inegalitarian, port city of Bombay, the place where India meets the world and which they all agreed was the heart of India’s economic miracle. Why capitalism, greed, economic freedom and cultural commercialism should be a self evident good thing in Bombay and not in America or Europe is one of those mysteries that defy rational explanation.
The panel agreed that by striking at Bombay the terrorists were attacking the freedom and the open spirit not only of the city but of today’s global civilization. Again, its is ironic that when George W, Bush and the neocons said the same thing about the attacks in the New York, they were hooted down by a crowd that claimed that the Islamists were only responding to western ‘injustice’.
It is to Rushdie’s credit that he rejected this explanation. He put down the Islamic terrorists and their ideology by misquoting M.L.Menken’s famous definition of puritanism . What Menken wrote was “At the bottom of Puritanism one always finds envy of the fellow who is having a better time in the world.” He then added “At the bottom of democracy one finds the same thing.”
Rushdie also unambiguously put the blame for the attack on Pakistan. The panel agreed India’s western neighbor was the source of the problem, a failing state, full of fury, and armed with nuclear weapons. Of course there were the inevitable claims that America’s relationship with Islamabad and especially the CIA’s support for the Afghan Mujahedin was somehow to blame.
Of course this meme fails to acknowledge that for the first twenty years of Indian independence the US tried desperately to make friends with New Delhi. Nehru, a socialist aristocrat, rejected offers of support from capitalist peasants like Truman and Eisenhower. He and his successors preferred to embrace the pro-Soviet Non-Aligned Movement. Pakistan’s elites were quite happy to embrace America, not just as a source of weapons and economic aide, but more important as a scapegoat they could blame for just about anything that went wrong with their country.
While Kamdar was ready to damn Bush at every occasion, she was also ready to threaten Pakistan with war if they did not repress the Islamic terrorists. She also mentioned that the US would have to somehow put the issue of its supply lines to Afghanistan onto the back burner while dealing with Islamabad. This problem has gotten a lot of attention lately, but when a US General pointed out that all of NATO’s fuel for its operations there comes from Central Asia the threat of a cut off seems to have lost its urgency.
In the end, one has to feel sorry for Rushdie. He must keep his up his standing as a man of the left, but he is too smart to swallow the kool-aid. So he is a hypocrite; not a big deal, hypocrisy is universal and anyone who is not at least to some degree is an obnoxious fool. He supported the Sandanistas when they repressed Nicaraguan free speech, but now celebrates the free media of India, not to mention his own right to write offensive novels.
The attack on Bombay was the sort of thing we have seen before, in the 1970’s and 1980’s Israel suffered from the same kind of terrorism and developed an efficient coastal protection system in response. India will too, eventually.
Terrorism is a contemptible form of warfare and the panel did not bother to refer to the attackers as anything other than cowards who went after ‘soft targets’. Rushdie stressed that they were incredibly coked up, snorting and shooting and snorting and shooting, all in the name of God.
In an electronics market in China last month, I found these intriguing items for sale.
Okay, “MP3” I understand. The MPEG-1 standard for digital media storage and transmission contained three audio formats. These were MPEG-1 audio layers 1, 2 and 3. Of these, layer 3 provided the highest audio quality, became the standard for compressed digital audio, and “MPEG-1 layer 3” became abbreviated to “MP3”.
“MP4” is slightly more problematic. The successor standard to MPEG-1 was MPEG-2. MPEG-2 is very important, but mainly because it contains much more advanced video formats than MPEG-1. DVDs and most digital television applications use MPEG-2 video. In terms of audio, MPEG-2 contains the three existing formats from MPEG-1 (including MP3) and a more advanced format called Advanced Audio Coding (AAC). Perhaps confusingly, AAC is very seldom used with MPEG-2 video, which is much more frequently paired with the MPEG-1 audio formats, or with Dolby AC-3 (which is not part of any of the MPEG standards).
However, AAC is also part of the MPEG-4 family of standards. (There is no MPEG-3). Due partly to AAC being the favourite audio standard of Apple, AAC is commonly paired with the video standards of MPEG-4, the two most common of which are the Advanced Simple Profile (MPEG-4 part 2) and the now favoured Advanced Video Coding (MPEG-4 part 10, known also as ITU-T H.264). This partnering between AAC and the MPEG-4 family of standards can mean that AAC audio is sometimes referred to as “MP4 audio”, with “MP4” as an abbreviation of “MPEG-4”, even though AAC as a format technically preceded MPEG-4. In addition, media of this form is often encoded using the MPEG-4 part 14 container format, which usually has the file suffix “.mp4”. Thus it makes a certain amount of sense for an AAC or MPEG-4 capable media player to be referred to as an “MP4 player”. In this case the “4” in MP4 means something different to the “3” in MP3, but there is some logic to it.
As to what an MP5 player might be, that is on a par with the European commission announcing that we must take steps to “put Europe into the lead of the transition to Web 3.0”, I fear. Sadly, I think it is unlikely that they are selling these.
I was wrong. I thought I had already found the world’s most ludicrously named chain of clothing stores.
However, the world is full of things that one has not dreamed of. In Hong Kong last week I found this.
I am going to be in Hong Kong, Shenzhen, Macau and thereabouts from Friday evening until October 26. If we have any readers there who feel like meeting up for a meal/drink, please let me know. I have been to these places on multiple occasions before and so do know my way round, but if anyone can think of anything particularly idiosyncratic (or even particularly new) that I may want to do or see, also please let me know.
Meanwhile, China legalises short selling:
China’s action contrasts with regulators in the U.S., Europe and Australia that have banned short selling in the past week to shore up financial shares battered by the global credit squeeze. China’s government is betting the changes will boost trading without spurring further declines after state share buybacks helped the CSI 300 Index rebound from a two-year low.
That is partly it. But mostly what China’s government seems to me to have been doing for many years now is tackling every domestic economic problem it has with a free market solution, and betting that even if such measures do not solve the immediate problem, they help in the longer run.
Via here and here.
Mr Kim and his elite did not wilfully seek the deaths of ordinary North Koreans, but they accepted them as collateral damage resulting from their need to maintain power.
– from the Economist yesterday
On a spring day in Beijing almost a decade ago, tens of thousands of people gathered on the pavement surrounding the high-walled Zhongnanhai compound, the Chinese equivalent of the Kremlin. They were protesting, but there was barely a murmur to be heard from the enormous crowd. There were no banners, no megaphones noisily chanting demands, no unruly behaviour. It was not a typical demonstration – the participants were seated and meditating. They stayed for around twelve hours. These people were members of the rapidly expanding Falun Gong sect, and they were asking for recognition, legitimacy and an end to perceived mistreatment from the Chinese central government. The then-Chinese premier met with the group’s leaders, following which they all left as quietly as they had arrived.
Shortly after this protest, the Chinese government declared the sect a dire ideological threat to the People’s Republic of China, and a huge and rigorous nationwide crackdown followed. Practitioners in powerful positions saw their careers ended abruptly. Thousands were ‘re-educated’. Several, according to numerous human rights advocates, did not survive their enlightenment at the hands of the Chinese state. The sect’s leader was demonised, its teachings subjected to the harshest denunciations. In response, many Falun Gong practitioners held silent protests all over China. A few caught the world’s attention by self-immolating in Tiananmen Square, which explains why each of the numerous military personnel guarding the square have a fire extinguisher placed within arm’s length of their positions.
Unsurprisingly, these protests failed. Falun Gong in mainland China is a massively diminished, illegal underground movement. It is still an extremely politically sensitive topic in China. It is carefully referred to as ‘FG’ when written about on-line, in the (probably vain) hope that such abbreviations will avoid the notice of China’s vigilant internet police (who probably do not care all that much about 99% of these references, but the fact that Chinese internet users go to such lengths is revealing in itself). The government has successfully and widely propagated the idea that Falun Gong is a degenerate cult. → Continue reading: A fork in the road
I was going to write about the unconscionable Russian attacks on Georgia and how it is more important than ever to confront and isolate Russia and impose a cost on Russian imperialism… but then I read this article by Marko Hoare, who has written some great things in the past on the Balkan conflict, and he says much of what I would have…
This is not a case of Moscow supporting the right of national majorities to secede – the Abkhaz have no majority, not even a plurality, in Abkhazia. Nor is it a case of Moscow supporting the right of autonomous entities of the former Soviet Union to secede – Moscow has extended the same support to the separatists of Transnistria, which enjoyed no autonomous status in the USSR, while denying the right to secede of the Chechen Republic. This is simply a case of naked Russian imperialist expansionism. It is Georgia which is fighting to establish its independence, and Georgia which deserves our support. Georgia is a staunch ally of the West; the third largest contributor of troops to the allied coalition in Iraq. A Russian defeat of Georgia would be a tremendous setback for the West’s credibility and moral standing; it would increase Russian control of our energy supplies and encourage further Russian acts of aggression in the former Soviet Union.
We cannot afford to back down before this act of Russian imperialist aggression. We should defend Georgia with all the means at our disposal. We should send troops to bolster her. We should threaten Russia with sanctions. Heroic Georgia is fighting our fight; she is defending the freedom and security of democratic Europe.
Amen.
Depending on whether or not they get lucky with the weather, the Beijing Olympics might not, or might, turn into a PR disaster both for the International Olympic Committee, who chose Beijing, and for the Chinese Government, who assured the IOC that pollution in Beijing would not be a problem. But, pollution in Beijing is already a problem:
Thomas Rohregger’s first breath of Olympic air was not what he expected. “I hadn’t thought that it would be so bad,” the Austrian said after his first training ride. “Really awful, my lungs and even my eyes are burning.”
Rohregger rode only the flat stretch of the road race course and didn’t get into the climbs. “That’s why I tried to ride a bit faster. But the pressure on my lungs was nearly unbearable. Three hours of training felt like six hours,” said Rohregger to Austrian television sender ORF.
I’ve been linking to news about Beijing pollution for a while now from my personal blog, and the man from Blognor Regis, to whom thanks, added that quote-and-link to my latest posting on the subject.
I also added a bit at the end of that same posting about how the architectural planning of the Beijing Olympics has been done by the son of Albert Speer, who is called Albert Speer. Albert Speer senior being the man who did a similar job for Hitler’s Olympics in 1936. My thanks to Mick Hartley for blogging recently about that. As another of my esteemed commenters said, you could not make it up. But as soon as I had stuck up that bit about Albert Speer Jnr., I worried that maybe someone had made it up, and that I had fallen for one of those internet hoaxes. I checked every date involved to see that it wasn’t April 1st. It seems, amazingly, to be true. Apparently Michael Jennings of this blog emailed me in April about this Speer connection, but I paid no attention then and can find no trace of this email now. My computer must have swallowed it. Or maybe I thought he’d made it up and deleted the email on purpose.
Undeterred, Michael J today emailed me another Olympic link worth following, to a Slate piece which asks of the Beijing Olympics: What could possibly go wrong? Pollution is number two on the list. Four is that the TV coverage might get screwed up, and five is that these Olympics may inflict food poisoning on lots of the athletes.
Blogging personally, and in my capacity as a London council tax payer, my biggest worry is that it will all go very smoothly, that many British people in particular will be very impressed and excited, and that Britain’s politicians will then be encouraged to spend even more billions in tax money on the London version of this idiocy in four years time than is set to be spent anyway.
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Who Are We? The Samizdata people are a bunch of sinister and heavily armed globalist illuminati who seek to infect the entire world with the values of personal liberty and several property. Amongst our many crimes is a sense of humour and the intermittent use of British spelling.
We are also a varied group made up of social individualists, classical liberals, whigs, libertarians, extropians, futurists, ‘Porcupines’, Karl Popper fetishists, recovering neo-conservatives, crazed Ayn Rand worshipers, over-caffeinated Virginia Postrel devotees, witty Frédéric Bastiat wannabes, cypherpunks, minarchists, kritarchists and wild-eyed anarcho-capitalists from Britain, North America, Australia and Europe.
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