The Economy

Recession

Google Trends: recession - Mozilla Firefox

I forget where I read that looking at how often the word “recession” appears in the newspaper is as good a method as any of determining whether we are actually in a recession or not, it might have been the Left Business Observer, but I after seeing the word pop up a few times recently, I thought I’d see what Google Trends showed. The result doesn’t look good.

Note that it is only the occurrence of the word that matters, the context is unimportant – as in the Feb 28th 2007 news story titled “Economists: Recession unlikely” which sparked off a flurry of searches on Google. More recent reports are far less optimistic.

Geothermal

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Speaking of Iceland … one of the coolest things about the country is how well they’ve used geothermal energy:

In Iceland, there are five major geothermal power plants which produce about 26% (2006) of the country’s electricity. In addition, geothermal heating meets the heating and hot water requirements for around 87% of the nation’s housing.

I’ve always wondered why Taiwan doesn’t make more efficient use of geothermal energy, especially given the large number of hot springs around the island. According to a recent article on the subject, “Taiwan imports over 97% of its energy supply from foreign countries, mostly from the Middle East.”

Currently almost none of Taiwan’s renewable energy comes from geothermal sources, and renewable energy accounts for less than 6% of Taiwan’s total energy needs. And yet, other Pacific Rim countries, such as the Philippines, Indonesia, and Japan make much better use of geothermal resources.

There is some hope however, the Chin-Suei geothermal energy project in Yi-Lan County will generate both electricity and hot water. “The first stage of this project will be completed before 2006, and the project has planned capacity of 5000 kW, sufficient to supply electricity for about 1700 families.” Not much, but its a start …

UPDATE: Taiwan’s Wuchi Power Plant – the world’s dirtiest.

Big Table

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For those who haven’t been following, Obama’s been doing his best to alienate the progressive left. That’s resulted in him butting heads with two of my favorite people: John Edwards and Paul Krugman. And while it may result in more corporate fundraising for Obama, he’s come out looking much worse for the wear.

Obama has framed himself as a candidate who will transcend partisan politics as well as someone who isn’t afraid to tell tough truths to voters. Those sound good in theory, but in practice it seems to result in Obama rehashing right-wing talking points when criticizing his collegues. He did it over social security, he did it comparing his health care plan to those of his opponents, and now he’s doing it over how he would go about implementing health care reform.

Want a candidate who will stand up for progressive values? Support Edwards!

UPDATE: Excellent (Krugman-approved) summary of the issues by Lambert.

Usury

Payday Loans

If thou lend money to any of My people, even to the poor with thee, thou shalt not be to him as a creditor; neither shall ye lay upon him interest. (Exodus, 22:25)

The key texts of Judaism, Christianity, and Islam are all very clear about the sins of lending money for interest – and yet it doesn’t seem to have stopped anyone who professes those faiths from making a good profit. When was living in North Philadelphia while attending Temple, the only businesses around us were funeral parlors, pharmacies, and check cashing places. Check cashing places offer “payday loans” which can have annualized interest rates as high as 390 to 900 percent! Things are even worse in the developing world, where suicide is one of the leading causes of death among rural women. Especially in China, but not because women try more often – just because they succeed more often due to inadequate emergency health care. It is a major problem in India as well.

Among the Chhara, the Denotified community at the heart of our film, as many as fifteen percent of the population still thieve for a living. Although there community increasingly boasts of lawyers, teachers, journalists, artists, and other professionals, many members of the community are unable to escape a life of crime. Part of the problem is simply discrimination. We know of one woman who has an MA in English literature, but can’t get a job as a teacher because nobody will hire a Chhara. But part of the problem is the curse of usury, as eloquently described in this article by Chhara journalist Roxy Gagdekar:

those trapped in Chharanagar’s criminal gangs, including Rohan, are caught in the double bind of debt of disrepute. A gang generally borrows money on heavy interest (5% to 10% per month) from moneylenders in and around the locality, and its burden increases after each failed criminal run. Chhara gangs, usually made up of five to 12 members, choose targets in cities other than Ahmedabad. Therefore every sortie drains the gang’s resources: money is spent for food, commuting, and accommodation.

… “The only solution is to try to steal enough to clear the whole financial burden of the crew,” said Nirmal, another Chharanagar resident bound by Bhach. “We don’t have property to mortgage or the goodwill secure loans from banks.”
Rohan, now in his 40s, joined a gang some 15 years ago. He has not been able to break through the forbidding circle of liability and thieves’ code of honour.

“I was shut into a gang when I was a student of second year, because we were starving,” he said.

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Stagnation

The productivity slowdown and the trouble with Europe-bashing - Paul Krugman - Op-Ed Columnist - New York Times Blog - Mozilla Firefox

From Krugman’s blog:

One of the big but little-noticed economic stories of the past few years is the sharp slowdown in US productivity growth. Dean Baker and John Schmitt are on the case; their recent article is definitely worth reading.

Baker and Schmidt argue that the era in which US productivity was surging ahead of productivity in other advanced economies may well be over. I’d add a further point: even before the latest data, tales of the contrast between the dynamic US economy and stagnant Old Europe, while not completely false, were greatly exaggerated.

For example, here’s French GDP per hour worked as a percentage of US GDP per hour worked since 1960. That slight dip toward the end – you can see it if you squint very hard – is all we’re talking about.

One America

The text of John Edward’s Hanover speech reprinted in full (via Crooked Timber):

Remarks as Prepared for Delivery: “To Build One America, End the Game”

Hanover, New Hampshire
August 23, 2007

This election is unlike any we have faced before. The stakes are higher. And the challenges we face as a nation are greater than at any time in memory.

We as a nation must choose whether to do what America has always done in times like these — change direction and move boldly into the future for the sake of our children, if not for ourselves, or wander in the same stale direction we have traveled in our recent past.

The choice we must make is as important as it is clear.

It is a choice between looking back and looking forward.

A choice between the way we’ve always done it and the way we could do it if we dared.

A choice between corporate power and the power of democracy.

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Prices

Almost every night the news features at least one story about rising commodity prices. A few extra cents for spinach or milk might not seem earth shattering, but I know how hard my students scrimp and save to get buy. At the school lunch buffet I load up my tray with a bit of everything and am amazed it still costs me less than US$2.50, but I look around at the students. They’re half my age and should be eating twice as much as I am, but they carefully try to keep the cost of their meal to under US$1.50. No wonder they have trouble studying!

A well researched story from CommonWealth magazine adds some complexity to this story.

Its true that, due to increased fuel costs and more expensive imports, the price of some of the staple products used by most consumers have risen dramatically.

In terms of commodity prices, corn, wheat and soybeans have risen 40 percent, 57 percent and 43 percent respectively over the past year. Food prices have risen 23 percent, according to IMF statistics, and the United Nations has warned that there is not enough grain to feed the world

This explains the regular news stories on the evening news. However, put in a wider perspective, inflation isn’t that big a problem for Taiwan.

In fact, although the prices of oil and imported commodities have risen, Taiwan’s price levels are modest when benchmarked against the international community. Fuel prices, for example, are lower than in other Asian countries. And even if prices are on the upswing, the net rise has been mitigated by substitutes found for more expensive imported commodities. Economists and research institutes contend that Taiwan does not have inflation concerns.

Moreover, even though wholesale prices have gone up, tight competition has made it difficult for them to pass those costs on to consumers. The overall consumer price index has only risen slightly.

The real problem, is not rising prices, but falling incomes. Wages are stagnating (“Over the past decade, salary growth has declined, from 4.89 percent in 1997 to an estimated 1.29 percent this year.”), the gap between rich and poor is increasing, and economic growth is lagging behind other countries with similar economies. But even more importantly, for understanding my students at Dong Hwa, there are increasing regional inequalities within Taiwan:

In 2005, average disposable household income in Hualian County ranked fourth lowest among Taiwan’s 23 counties and cities. In 11 of the island’s 23 cities and counties, average household disposable income levels actually fell in 2006 compared to the year before, and the decline was felt in both agricultural and industrial areas.

Needless to say, Aborigines are especially hard hit since they live in agricultural areas and migrate to the industrial areas for work.

Illiteracy

A few weeks ago Victor Mair wrote a guest post on Language Log implying that China’s high rates of illiteracy could be cured by reforming the script, replacing difficult to learn characters with phonetic spelling. There is lots of good discussion of this topic on Language Hat, and there was a good post on the subject last year over at Pinyin News, which also led to some great discussion.

First off, let me say right off the bat that I’m all for it. Sure, make it much easier to read and write Chinese! The Vietnamese did it, the Koreans did it, why not the Chinese as well?

But I think it is important to keep a sense of perspective. Although difficult, learning Chinese characters is not impossible, as demonstrated by the millions of children who accomplish this feat ever year. Moreover, there are strong links between Chinese culture and writing. I personally know of several people who have changed the characters used to write their name in order to improve their fortune.

It is also worth noting that even though China uses simplified characters and Taiwan uses traditional characters, illiteracy is not the problem in Taiwan that it is in China. Clearly other factors are at work here. These factors include economic inequality, the rural-urban divide, poorly trained teachers, etc. Didn’t anyone see the movie “Not One Less” 一個都不能少?

Another major obstacle to reform is the fact that Chinese characters help bridge the linguistic divide between various Chinese languages, and even between Chinese and Japanese who also use a fair number of characters in their writing. In fact, a major motivation for various reforms (such as Vietnam and Korea) was precisely the desire to lessen the power of China and Chinese culture on those societies. In this sense reform is not merely a matter of pragmatism, but is very much about politics and nationalism. Only an event akin to the collapse of the Soviet Union after the fall of Communism would compel China to abandon writing with characters.

Finally, Mair’s argument implies that writing reform would be the most efficient means to improving literacy in China, but I don’t believe that to be the case. Although pinyin is already used to teach basic literacy, the complete elimination of chinese characters would be an incredibly costly project, requiring that millions of textbooks and materials (even warning labels) be transliterated. All this would be unnecessary for the large portion of the population which is educated and literate, and wouldn’t necessarily lead to any improvements in rural education or education for poor rural immigrants in urban centers. Nor would it be simply a one-time cost, as all of China’s historical works would need to be transliterated for future generations cut off from their history. Or perhaps we would see the emergence of a new kind of inequality in which an educated elite is able to read historical works, but the rest of the population can only read those texts available in electronic form (where it is possible to produce machine transcriptions).

Would this really be easier than simply doing something about the growing inequality in China? Lets look at India by comparison. India has even higher rates of illiteracy than China (by official counts), even though it uses alphabetic scripts. However, it is the (democratically elected) Communist state of Kerala which has some of the highest rates of literacy in the entire country.

Mr. Ravindran says land-reform measures established after the state of Kerala was formed in 1956 also contributed to the success of its literacy movement. “When every family owns a piece of land, no matter how small, they have a sense of belonging,” he says. “Then they can plan for the future, and education of their children becomes a part of that planning.”

Official estimates say that the number of landless peasants in China has swelled to over 70 million as a result of recent “reforms.” Surely there are more pressing things for the Chinese to worry about than orthography? Just as assuredly, worrying about these other pressing matters is likely to do more to alleviate illiteracy than mere writing reform. Yes, in the best of all possible worlds these things would happen together, but I think it is neither realistic nor even necessary to insist that they do.

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