Thursday, June 25, 2009

Monday, June 22, 2009

False Hope for Iran

There seems to be a hazy optimism that the "pro-democracy" protests in Iran imply a shift in the Iranian public's attitude toward the tyranny of their government. On the surface, this seems plausible. There seems to be real anger over the rigged election. Also, the brave individuals who are taking to the streets are openly opposing their government's intimidation. (The "Supreme Leader" has vowed bloodshed for those who continue to protest.) But there is little reason to be sanguine about the turmoil in Iran. They are not protesting against the real enemy: theocracy.

Mir Hossein Mousavi, the candidate who may have actually won the election, is far from being a threat to the status quo of the Iranian government. He and the three other presidential candidates (including Ahmadinejad) were selected, were given permission, by the "Supreme Leader" to run for office. It is highly unlikely that Ali Khamenei would have selected a revolutionary from the hundreds of hopefuls who were running for the presidency. Further, the office Mousavi was seeking is, as Time journalist Joel Stein recently noted, akin to the governorship of an American state. The real power lies with the Ayatollah, and the clerics who sit on the Guardian Council.

A recent article by Michael Lind, in Salon, argues the point almost no one is making--"there can be no freedom without secular government."

The larger issue is the question of what comes first: separation of church and state, or democracy. America's Founders had no doubts on that score. Democracy requires citizens who are free from "superstition" and "priestcraft," to use 18th-century language. Americans have usually believed that religion can play a constructive role in a democratic republic by encouraging moral behavior. But in the traditional American view, theocratic democracy is nothing more than majoritarian tyranny, whether the clerics have a formal role in the state or merely tell the voters how to vote. And even secular democracy is not a goal in itself. It is merely a means to an end: the protection of natural rights.

The idea of universal, basic natural human rights is incompatible with theocracy in any form.

This is an especially good paragraph:

A government, in short, is a limited-purpose, secular, worldly agency, not a divine institution. It is more like a property-owners association than like a church. There would be no point in a property-owners association that sought to do its limited, straightforward business according to the precepts of Catholic natural law, or Baptist theology, or Orthodox Judaism. Likewise, from the natural rights liberal perspective the very idea of a Christian state or an Islamic republic seems absurd, like a Buddhist municipal water utility district.

Real freedom will elude Iran as long as the people continue to fight for the limited scope of a theocrat's idea of "democracy," and not for the complete separation of church and state.

Saturday, June 20, 2009

The Rose-Tinted Recession

One of the happy consequences of the recession, and the decrease in the demand for durable goods, is how it forces businesses to offer better for less.

The New York Times reports that major retailers are poised to offer high-end consumer goods at mid-range prices. This is a trend that Target popularized in the 1990s, by selling trendy wares by the likes of Michael Graves and Todd Oldham, at off-brand prices. Now luxury chains are following suit:
At high-end stores, the era of ever-escalating prices on luxury goods appears to be over. In the future, consumers will still be able to buy chic brand names, but at a wider range of prices.
High-end stores like Neiman Marcus, Saks and Coach will offer more midpriced merchandise. Many chains, including Wal-Mart, will carry less inventory and fewer brands. The likes of Sears and J. C. Penney will put self-service computers in stores so customers can browse collections or buy out-of-stock items. And retailers of all stripes will offer more exclusive merchandise and more attentive customer service.
Prices will also be lower at some “affordable luxury” chains, like Coach, which is increasing the proportion of handbags it sells for less than $300. About 50 percent of the company’s handbags will cost $200 to $300, in contrast to about 30 percent of handbags last year.
Consumers will also see even more of the exclusive collaborations between retailers and prominent designers that are so prevalent today. That will help distinguish stores as well as avoid price wars because the same items will not be sold at multiple chains.
This illustrates the genius of the profit motive, coupled with the prospect of bankruptcy. Even during boom times, capitalism forces producers to innovate to survive. This imperative is only amplified during a downturn. (Especially when a bailout is not an option.)
Economists and analysts forecast that it will take up to 10 years to return to 2007 levels of consumer spending — which makes now a good time for retailers to re-imagine the future. Paul A. Laudicina, chairman and managing officer of A. T. Kearney, the management consulting firm, noted that major consumer innovations like Neoprene and Teflon came out of the Depression.
The NYT article posits that consumers will also encounter fewer choices on the shelves:

Another change is that consumers will have fewer brands from which to choose. Wal-Mart, Target, Home Depot, and PetSmart are just a few of the chains winnowing their brands. As Home Depot’s executive vice president for merchandising, Craig Menear, put it: consumers are “time-starved” and “looking for simplification in the entire shopping experience.”

That may delight minimalists, because it will be easier to find items on the shelves. But it also limits choice.
Does it? I think this merely reflects the new reality of retailing: brick-and-mortar firms have already been forced to pare down their inventories, ceding variety to retailers like (and the brick-and-mortars' own websites). This is the best-of-both-worlds scenario outlined in Chris Anderson's book, The Long Tail. The brick-and-mortar stores focus on popular goods, while online retailers play to the niche.

The article warns that consumers may consequently face bare shelves:

Another potential drawback for consumers is that stores may run out of stock more quickly than in the past because, as Mr. Lundgren of Macy’s explained, “retailers learned that you can’t get out of the merchandise that you ordered months before.”

“Instead,” he said, “you’re more likely to see retailers ordering fewer of each individual size and taking that risk that they’ll sell out and not capture every sale, rather than the risk of having too much inventory left over to mark down.”
This seems unlikely. Many retailers already practice the just-in-time inventory strategy, which reduces the lag between the sale of good and the shipment of its replacement. This is the business model that made Wal-Mart the world's most successful retailer.

Yes, things are dark. But light can still shine on the deepest economic abyss.

Thursday, June 18, 2009

Heads I Win, Tails You Lose

This article from illustrates how macroeconomics allows politicians to have it both ways:
President Obama and his critics have a major disagreement. He says his accelerated economic stimulus efforts will create 600,000 jobs by the end of the summer. Senate Republican Leader Mitch McConnell of Kentucky, however, doubts "the spending binge we're on is going to produce much good." Both can't be right. But neither has to fear being proved wrong.

Why not? Because there is no persuasive way of determining the effect of implementing the president's policies. No matter what happens, each side can claim vindication.

If the economy improves and unemployment drops, Obama can take credit. If it fails to improve and unemployment rises, though, he can say he averted an even worse showing. Republicans will take the opposite tack—attributing any improvement to the natural resilience of the economy and blaming the administration if things get worse. And neither side will really know who's right.

Wednesday, June 17, 2009


Paul Krugman, from 2002:
The basic point is that the recession of 2001 wasn't a typical postwar slump, brought on when an inflation-fighting Fed raises interest rates and easily ended by a snapback in housing and consumer spending when the Fed brings rates back down again. This was a prewar-style recession, a morning after brought on by irrational exuberance. To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.
Mission accomplished. [HT: Arnold Kling]

Wednesday, June 3, 2009

A Win for Marx?

Danial Gross get's it wrong:
It's been a long time since American devotees of Marx (Karl, not Groucho) have had much to cheer about. But with the bankruptcy filings of General Motors and Chrysler, and the transfer of stock ownership from the firms' long-suffering shareholders to the government and unions, communists of the world can rejoice. The workers are now, finally, significant owners of the means of production. The United Auto Workers control about 65 percent of Chrysler and 17.5 percent of General Motors.
This is another step towards towards corporatism, not communism. (Thus a win for Plato, not Marx.)

Jonah Goldberg, not someone I typically side with, understands this.

Live Free or Die

New Hampshire makes six.
The New Hampshire legislature approved revisions to a same-sex marriage bill on Wednesday, and Gov. John Lynch promptly signed the legislation, making the state the sixth to let gay couples wed.