Thursday, November 10, 2011

If You Wish Upon A Star

Just came across some amusing observations about libertarians, anarchists and other utopian visionaries in a blog post by Belle Waring. A quote that conveys the main idea:

"Now, everyone close your eyes and try to imagine a private, profit-making rights-enforcement organization which does not resemble the mafia, a street gang, those pesky fire-fighters/arsonists/looters who used to provide such "services" in old New York and Tokyo, medieval tax-farmers, or a Lendu militia. (In general, if thoughts of the Eastern Congo intrude, I suggest waving them away with the invisible hand and repeating "that's anarcho-capitalism" several times.) Nothing's happening but a buzzing noise, right?

"Now try it the wishful thinking way. Just wish that we might all live in a state of perfect liberty, free of taxation and intrusive government, and that we should all be wealthier as well as freer. Now wish that people should, despite that lack of any restraint on their actions such as might be formed by policemen, functioning law courts, the SEC, and so on, not spend all their time screwing each other in predictable ways ranging from ordinary rape, through the selling of fraudulent stocks in non-existent ventures, up to the wholesale dumping of mercury in the public water supplies. (I mean, the general stock of water from which people privately draw.) Awesome huh? But it gets better. Now wish that everyone had a pony."

Wednesday, November 9, 2011

Europe - Is Anybody Watching?

Europe doesn't seem to be getting its act together. The new head of the ECB does look more willing to take action, but the pressure for austerity in the peripheral countries is strong. This seems likely to drag those countries further into debt and economic distress.

I believe this is economic foolishness on a grand scale. These are contractionary policies and European countries aren't going to be able to reduce their debt burden without expanding their economies. The big question is whether they have already entered a death spiral. The Euro zone is looking more and more shaky.

Last month I mentioned that the discussion blaming Greek and Italian debt entirely on improvident actions by Greece and Italy reminded me of discussions in the sixties and seventies about balance of payments issues.

British economist Gavyn Davies makes the connection explicit and clear in a recent blog post "The Eurozone Decouples From the World."

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"It is normal to discuss the sovereign debt problem," Davies explains,  "by focusing on the sustainability of public debt in the peripheral economies. But it can be more informative to view it as a balance of payments problem." I think that analysis is exactly right. He goes on to provide statistics: "Taken together, the four most troubled nations (Italy, Spain, Portugal and Greece) have a combined current account deficit of $183 billion. Most of this deficit is accounted for by the public sector deficits of these countries, since their private sectors are now roughly in financial balance. Offsetting these deficits, Germany has a current account surplus of $182 billion, or about 5 per cent of its GDP."

So what should be done?  If it is a balance of payments problem, Davies explains, "it is clear that there needs to be a capital account transfer each year amounting to about 5 per cent of German GDP from the core to the periphery. Without that, the euro will break up. Until 2008, this transfer happened voluntarily, by private sector flows, mainly in the form of bank purchases of higher yielding sovereign bonds in the peripheries, and to a lesser extent via asset purchases (notably housing in Spain). Since 2008, these private flows have dried up, and in fact reversed, so the public sector has had to step in. It has done so in the form of direct sovereign loans, and more importantly by international transfers which have been heavily disguised within the balance sheet of the ECB. Although disguised, these transfers are very real." What Davies fails to explain as clearly as he might, is that the reason the current account balance is a problem is that: a) the periphery countries don't have their own currency, but are forced to borrow in a currency over which they lack control; b) they are precluded from achieving balance by devaluation (that is, they have a very fixed exchange rate); and c) they still have all of the burdens of sovereignty with respect to things like funding armies, police forces, social programs, etc.

Davies goes on: "The eurozone’s proposed solution to this problem – budget contraction plus economic reform in the debtor nations, with no change in policy in the creditor nations – is very familiar to students of balance of payments crises in fixed exchange rate systems such as the Gold Standard or the Bretton Woods system in the past. It is not impossible for these solutions to work, but they are very contractionary for economic activity, and very frequently they fail. When they fail, they lead to devaluations by the debtor economies, normally because the required degree of contraction proves politically impossible to undertake. That is where Greece probably finds itself today. Others may be in the same position before too long."

Now Davies reaches the crux of the matter. The EU has decreed a punishing regime for Greece and soon will for Italy. It isn't clear how long Greek and Italian voters will stand for the solution. Leaving the Euro zone will not be painless, but it may turn out to be the best solution.

"The reason why the eurozone strategy is so difficult to implement is that both of its required actions are likely to make the European recession worse in the immediate future. This has already become clearly apparent in the negative feedback loops which have developed as budgetary policy has been tightened. None of the austere budgetary plans which have been announced during 2011 will achieve their fiscal targets in 2012 in the context of the recessions which will probably be encountered by many countries, and that includes France. There is no such thing as “expansionary austerity”, certainly not in countries which cannot devalue or reduce their long term interest rates. These countries are now chasing their own tails."

"Less widely appreciated," Gavyn explains,  "is the fact that structural economic reform will also make the recession worse in the next couple of years. This reform is absolutely essential in countries like Italy, which are otherwise facing a future of indefinite stagnation, but IMF research shows that in previous similar examples, labour market reform has initially led to higher unemployment and lower GDP as workers are shaken out of unproductive employment. The IMF warns that these reform programmes work best when economies are beginning to recover from recessions, and when there is scope in government budgets to compensate the losers through tax cuts or other measures of support. Neither of these conditions apply today."

"Is there," Gavyn asks,  "any way of improving the chances of success for the eurozone’s chosen strategy? Theoretically, yes. Germany, as the main creditor nation could choose to grow faster, and accept higher domestic inflation for a while, in order to ease the process of adjustment. In practice, Germany shows no sign of accepting this, but it is the best solution available, not only for the debtor economies, but also for Germany itself."

So the logical conclusion is, if the Euro zone collapses, it should not be Greece or Italy which shoulders the blame, but Germany.

Tuesday, November 8, 2011

Pamlico County Elections Today

I've been busy the past couple of days working with our election officials to make sure we have smooth municipal elections. We succeeded. Our use of plain paper ballots for low-turnout municipal elections worked well.

At first glance, it appears that turnout in the Town of Oriental was almost fifty percent. That's pretty good. But for the county as a whole, it was only about eighteen percent.

We had a lot of new poll workers, and I was very pleased at how well they did their jobs. It looks like we will continue the Pamlico County tradition of well-run elections.

Results? Tonight's count was only preliminary. In Oriental, it appears that the incumbent mayor and every commissioner candidate on the ballot has won. But that's far from certain. There are some issues with write-in votes that will require a determination by the Board of Elections. We plan to meet as soon as possible to address those issues. Even after that, we won't know for sure until we meet for the official canvass. There are a number of provisional ballots that can't be opened until canvass, which is scheduled for 11:00 am Tuesday, November 15.

Sunday, November 6, 2011

Time

It's time for my annual rant observations about time. We have returned to Eastern "standard" time.  If it's standard, why not keep it all the time?

Have you noticed that "daylight savings time" doesn't actually save any daylight? In fact, the actual length of a day varies with the declension of the sun (don't ask) and the position of the earth in its annual orbit around the sun.

In an earlier (simpler?) time in the history of man, human activity was governed by the position of the sun relative to the particular place people lived. Before clocks, that position was measured by sundials. Before sundials, prehistoric man built vast public works (e.g. Stonehenge) to keep track of the seasons by solar and sometimes by lunar observations. Our time scale was slower, but no less inexorable.

Peasants went out to till the fields based on sunrise and sunset and when the sun was overhead. Before the sun crossed the local meridian was ante meridian (a.m.) and after it crossed was post meridian (p.m.). It bothered no one if the local time by sundial in Prague was different from that in Vienna.

Even at sea, where ships have no fixed location, time was reset every day at local apparent noon (when the sun crossed the meridian) and the officer of the deck received permission from the captain to "strike eight bells on time."

This perfectly satisfactory arrangement was destroyed by the railroad. Railroads wanted to run according to a fixed, printed schedule. They couldn't handle differences in local time between Prague and Vienna and every little train stop in between. Time must be made to conform to the mechanical age and become standardized.

But now we have computers. Computers can't actually think, but they can keep track of vast amounts of data, including the longitude of every town, city and metropolis on earth. It is longitude that determines local time. We could all set our timepieces to global standard time (that is, Greenwich Mean Time) and refer every time-based activity to that standard. That would satisfy the need for a time standard for any scheduled operation. It would make trains and airplanes happy. For local activities, just subtract or add a longitude-based time correction to derive local standard time. It would no longer matter to the railroads that Prague, Budweis and Vienna are on slightly different local times. Or Boston, New York, Philadelphia and Washington.

Oriental could have its own standard time.

Now synchronize your sundials.

Thursday, November 3, 2011

Greece And The Euro

Looks like Prime Minister Papandreou has backed off of his plan to hold a referendum on the EU "rescue" [read: punishment] plan for Greece. Lots of pressure from EU members, especially France and Germany, and also from the US.

I could be wrong, but in the end I think it will make no difference. The Euro zone was a jerry-built house that is likely to collapse sooner or later, what ever happens with Greece. The Greek people could still trigger a fall of the Papandreou government and cause early elections. Even if that doesn't happen, the mood of the electorate is not likely to be any better when elections are scheduled next year. That is, I don't think another year of pain and austerity, recession, lost jobs and poverty in order to avoid displeasing German bankers who dominate the European Central Bank will improve their willingness to passively accept their fate.

What might alleviate the displeasure in Greece as well as in Italy, Spain and Portugal would be an ECB program to expand the economy. That doesn't seem to be in the cards. The beatings will continue until morale improves.

It can't help the situation that the European Commission agent in Athens to "help" the Greeks is Horst Reichenbach, a German former official of the European Bank for Reconstruction and Development. Not surprisingly, older Greeks remember the last time that Germans came to run the affairs of Athens. They aren't fond memories.

The late historian Tony Judt, in his seminal history, Post War, revealed the extent to which young Europeans of the World War II generation received their first experiences of government planning during German occupation. They learned the techniques and were exposed to a vision of the possibilities. The European project has been, to a greater extent than most Americans realize, an outgrowth of that experience. One legacy has been a tension between a generation who view themselves as European and an overlapping generation who take a more nationalist view of self-determination as an ideal.

It isn't yet clear how the tension will be resolved in Greece. I wouldn't bet against a return of nationalism.


Wednesday, November 2, 2011

The Ninety-Nine Percent

The issue isn't just jobs. Even slaves had jobs. The issue is wages.

Jim Hightower

Oriental Board of Commissioners Pot-Pourri

Last night's board of commissioners meeting was the last regular meeting before residents elect a new board. The board addressed a number of loose ends, most of which will be up to the newly-elected board to unravel or to knit up, as the case may be.

I have attended town board meetings fairly regularly since January of 2006, as an interested citizen, as a member of the planning board, as a commissioner, and as a member of the Pamlico County board of elections. I also attend meetings of the Pamlico County board of commissioners fairly regularly. It's the sort of thing policy wonks do.

Some things I've noticed:
1.  Meetings take too long and are too chaotic;
2.  The board spends too much time on minutes - suggestions: add minutes to the consent agenda; confine minutes to recording what was done, not what was said; keep audio recordings as a record of the meetings in case a member of the public or press wants to listen (that's what we do at the County board of elections);
3.  Rather than having a representative of each town board present a report at every meeting, add reports to the consent agenda. If something the board does or wants to do requires Town Board action, put it on the correspondence agenda. Otherwise, don't waste time on it;
4.  If a member of the public or a commissioner wants his or her comments in the record, encourage that person to submit a written comment to be appended to the minutes;
5.  Be meticulous about following requirements for closed sessions - it generally isn't good enough to mumble the relevant paragraph of North Carolina General Statutes. Western Carolina University has prepared a very good model resolution for going into closed session. I recommend the new board consider adopting it. Here is the model resolution:


North Carolina Open Meetings Law-Model Motion For Closed Session
I move that we go into closed session to:
[Specify one or more of the following permitted reasons for closed sessions]
+prevent the disclosure of privileged information
    +under ___________________of the North Carolina General Statutes or regulations.
    +under ___________________of the regulations or laws of United States.
        {You must identify the specific law}
+prevent the premature disclosure of honorary award or scholarship.
+consult with our attorney
    +to protect the attorney-client privilege.
    + to consider and give instructions concerning a potential or actual claim, administrative procedure, or judicial action.
    + to consider and give instructions concerning a judicial action titled
    _______________ v.____________________________________.
+discuss matters relating to the location or expansion of business in the area served by this body.
+ establish or instruct the staff or agent concerning the negotiation of the price and terms of a contract concerning the acquisition of real property.
+ establish or instruct the staff or agent concerning the negotiations of the amount of compensation or other terms of an employment contract.
+ consider the qualifications, competence, performance, condition of appointment of a public officer or employee or prospective public officer or employee.
+ hear or investigate a complaint, charge, or grievance by or against a public officer or employee.
+ plan, conduct, or hear reports concerning investigations or alleged criminal conduct.
(6/24/02)

6.  It has been a frequent practice for the board to take up substantive initiatives, hold a cursory discussion and adopt resolutions during the "non-agenda" period at the end of meetings. Such actions may relate to matters of interest to citizens who attended the meeting, but when nothing came up, they left. Then the board acted. I think this is a bad practice. The Pamlico County Board of Commissioners follows a different procedure. At the beginning of each meeting, the chair asks if any member wants to add anything to the agenda. If all members agree, the item is added. If any member objects, the item is not added. No action is taken on any matter not thus added to the agenda. I have adopted a similar procedure for the county board of elections. I recommend the Oriental Town Board adopt a similar procedure;
7.  The board holds a so-called "agenda" meeting the Thursday before each regular meeting - the purpose is supposedly to agree on the agenda for the meeting (additions to the agenda should thus be very rare). In practice, the board often uses the "agenda" meeting to conduct regular business. Suggestion: If a single regular meeting each month is not sufficient to do the town's business, the board should schedule two meetings a month.

Tuesday, November 1, 2011

Town of Oriental Absentee and Early Voting

The Pamlico County Board of Elections met today at 2:00 pm to review and approve absentee votes cast by mail and in person at our one-stop location. As of that time, county residents had cast sixty-seven votes. Sixty of the votes were for the Oriental municipal election.

One-stop early voting will continue at the Board of Elections office in Bayboro for municipal elections in Alliance, Bayboro and Oriental until 1:00 pm Saturday, November 5. Election day at the normal municipal polling place will be held from 6:30 am until the polls close at 7:30 pm on Tuesday, November 8. Preliminary informal election result will be posted that evening.