Economic growth and happiness

Kenneth Rogoff touches upon an interesting subject - the relation between the economic growth and the people's well-being:
"But there might be a problem even deeper than statistical narrowness: the failure of modern growth theory to emphasize adequately that people are fundamentally social creatures. They evaluate their welfare based on what they see around them, not just on some absolute standard.


The economist Richard Easterlin famously observed that surveys of “happiness” show surprisingly little evolution in the decades after World War II, despite significant trend income growth. Needless to say, Easterlin’s result seems less plausible for very poor countries, where rapidly rising incomes often allow societies to enjoy large life improvements, which presumably strongly correlate with any reasonable measure of overall well-being."

My comments:
This should certainly excite the participants of the Israeli social protests, who pointedly complained that the healthy state of the Israeli economy indicators has nothing to do with their well-being.

My objection is that we can hardly measure happiness. In fact, I doubt that one can talk about growth of happiness between generations - it is too personal a category. Every generation estimates its level of happiness by the worst level of the unhappiness that it has known: regardless of how high we make today the welfare benefits and the taxes on "the rich," and regardless of how low we make the apartment rent and the prices on the cottage cheese -  thirty years from now our children will wine just like we do that the welfare is decreasing, that rich do not pay enough, and that the prices are too high.

20 years later...

The first image is that of an "Iron Felix" statue in Moscow is dismantled after several days of massive demonstrations in 1991.

Felix Dzerzhinskiy was the Russian Che Guevara - an idealistic fighter against the "enemies of the people" and the founder of NKVD (later known as KGB).

His iron statue in front of the KGB headquarters in Lubyanka Square in Moscow, known as "Iron Felix," was considered the symbol of the communist oppression.

The second photo is that of the "Tent City" protests in Tel Aviv in August 2011 - almost exactly 20 years after the fall of the "Iron Felix."

In dubious ignorance, many young people nowadays (not only in Israel) consider Che Guevara, another "professional revolutionary," a hero on the fight for human rights.

Added later:   
Minor correction - Felix was the founder of "CheKa" (curious name, but no connection to "Che" - it was in 1917), which later became NKVD and later KGB

Libertarianism

This article is discussing the conservative ideology represented by Rick Santorum, the new favorite of the Republican primaries. I post it however in order to give a clear definition of libertarianism (aka Ron Paul and von Mises Blog):
"Libertarianism is an extreme form of individualism, in which personal rights trump every other social goal and institution. It is actually a species of classical liberalism, not conservatism — more directly traceable to John Stuart Mill than Edmund Burke or Alexis de Tocqueville. The Catholic (and increasingly Protestant) approach to social ethics asserts that liberty is made possible by strong social institutions — families, communities, congregations — that prepare human beings for the exercise of liberty by teaching self-restraint, compassion and concern for the public good. Oppressive, overreaching government undermines these value-shaping institutions. Responsible government can empower them — say, with a child tax credit or a deduction for charitable giving — as well as defend them against the aggressions of extreme poverty or against “free markets” in drugs or obscenity."

A comment:
Libertarianism, represented by Ron Paul, is a curious ideology: On the one hand, in its staunch anti-war, anti-interference stance it is very similar to the extremely left ideologies, such as the extreme wing of the Democratic party in US or Meretz and Hadash in Israel. On the other hand, applying consistently the same pro-individual position to the economy, libertarianism advocates wild capitalism with minimal government regulations and totally free international trade (no tarifs, in particular) - a position antithetical to the traditionally pro-welfare left.

Sovereign debt vs. the debt in Euro-zone

The difference between a sovereign debt and the debt of a country within the Euro-zone (in line with a good sovereign debt analysis that I quoted previously):

"French officials apparently don’t recognize the importance of the fact that Britain is outside the eurozone, and therefore has its own currency, which means that there is no risk that Britain will default on its debt. When interest and principal on British government debt come due, the British government can always create additional pounds to meet those obligations. By contrast, the French government and the French central bank cannot create euros.

If investors are unwilling to finance the French budget deficit – that is, if France cannot borrow to finance that deficit – France will be forced to default. That is why the market treats French bonds as riskier and demands a higher interest rate, even though France’s budget deficit is 5.8% of its GDP, whereas Britain’s budget deficit is 8.8% of GDP."

The same article also contains an interesting piece of history:
"It was French officials Jean Monnet and Robert Schuman who launched the initiative for European political union just after World War II with the call for a United States of Europe. The French regarded the creation of the euro as an important symbol of progress toward that goal. In the 1960’s, Jacques Delors, then the French finance minister, pressed for a single currency with a report, “One Market, One Money,” which implied that the European free-trade agreement would work only if its members used a single currency."

I swear that I did not know about this fact when I named one of my posts United States of Europe, though I admit that the idea is obvious.

How progressive is the "progressive" thinking?

A couple of words about the post on the right, since it highlights one of the main reasons for my disappoitment with everything "progressive" - the fact it is nearly always progressive only in its shape, rather than its essence.

Although the post makes a seemingly reasonable point, it fails at least twice on this very point:

1. By appealing to viewer's wild emotions ("Fucking act like it.") rather than to his/her ability to reason that has evolved throughout the 4 billion years

2. By using expression "evolutionary success" rather than "evolutionary process," which betrays the authors ignorance. Indeed, "success" is something implying a directed intention or a plan, whereas the reason why some people refuse to accept the evolution is precisely the lack of any "intelligent design" behind the rather random evolutionary process.

Does a solution always exist?

Javier Solana's very wise words about the different approaches to solving problems:
"For China, problems are judged according to the country’s own history and from the standpoint of domestic policy – all the more so the closer the problem is to its borders. For the West, especially the US, every problem should have a solution within a finite period of time. While the US breaks down problems and tries to find solutions for each part, China considers political problems unhurriedly, as an extended process that might have no resolution."

Unfortunately, neither the Western leaders, nor Mr. Solana himself demonstrate this kind of wisdom when in it comes to the Arab-Israeli conflict.

Ron Paul under a microscope

A well-respected Washington Post columnist attacks Ron Paul. While Paul is unlikely to win the Republican presidential nomination, the attack is probably motivated by the candidate's high chances of winning the primary in Iowa, which will make him the subject of the media discussions for the next few weeks and may be potentially dangerous for the other candidates (What matters is not only the possibility that Paul wins the nomination, but also reshuffling of the other candidates, depending on how close their numbers in Iowa will be in respect to his.)

I do not support Ron Paul. I do think that many of his positions on foreign policy and economics are extreme, and that the accusations of racism against him are not completely ungrounded. In my opinion, the real problem is not the views of the particular person, but the huge gaps in the Republican political spectrum, which are seriously damaging the political discourse in the United States: the gaps between the ridiculous positions of Paul, those of "social conservatives", represented by Bachman, Perry, Palin, and Santorum, and the moderate-and-therefore-unpopular figures, such as Romney, Gingrich and Huntsman (all three have the records of supporting openly Democratic positions on healthcare, abortion etc.)

Ilan Grapnel speaks about our freedoms, the system and the Egyptian revolution

Ilan Grapnel's moving and intelligent note about his detention in Egypt on charges of spying for Israel.

A few quotes:
 On freedoms that we take for granted, especially when complaining that Israeli democracy is about to end, every time the Knesset passes a silly law, likely to be stricken down by the High Court. While such complaints are legitimate, they should be taken in prospective of those freedoms that we truly have, while many in the world don't:
"Five months in an Egyptian jail gives a person a lot of time to think. When you are not pacing or trying to catch an hour of afternoon sun through the barred window, there are thoughts of home, family, the freedoms Westerners take for granted, what exactly got you into the mess and even why you came to the country that locked you up. Two months after my release, as I watch news of the Egyptian military’s violent suppression of protests and raids on nongovernmental organizations, I still think of my first hours of arrest, when I was handcuffed and blindfolded."

An acknowledgement of the help from the Israeli government where it is due - something that many opponents of the current government coalition find hard to do, and which makes their arguments look biased and irrelevant. (Although Grapnel stresses the role of the US officials, it is worth remembering that he was released in a prisoner swap between Egypt and Israel.) 
"After these first two weeks, the interrogations ended, but my detention continued. Thus began my solitary confinement, which became the true ordeal — near-complete isolation, interrupted just twice a month by consular visits that lasted only 40 minutes. But thanks to the work of so many U.S. and Israeli government officials, I was not lost in the system. My parents and U.S. officials got me books, which I read slowly because I did not know whether I would get more or how long I would be jailed."

A fair assessment of the outcome of the Egyptian revolution:
"People ask, “So what do you think of Egypt and your mission now?” My answer is constantly evolving. As my detention and recent events and repressions in Egypt make clear, the revolution brought only superficial change. The junta’s focus on external actors represents a desperate attempt to avoid culpability and abdication of power."