Big electoral wins for 2 North Korean defectors — and South Korean democracy

Good news! When will the Korean peninsula finally be unified again! Will it only happen after Communist Party of China has been replaced by constitutional democracy and after Putin the Terrible?

Big electoral wins for 2 North Korean defectors — and South Korean democracy | American Enterprise Institute - AEI: This week’s National Assembly elections in South Korea saw two North Korean defectors make history, providing a victory for Korean democracy as a whole.

Breaking out: Brazil’s First Capital Command and the emerging prison-based threat

What is going on in Brazil? A dominant national and transnational organized crime syndicate operating out of the prison system in Brazil?

Breaking out: Brazil’s First Capital Command and the emerging prison-based threat | American Enterprise Institute - AEI: Key Points Much of Brazil’s deadly urban violence is the direct result of territorial battles involving the country’s powerful transnational organized crime groups, many of which trace their origins to the country’s dangerous and overcrowded prisons. The Primeiro Comando da Capital (PCC), or First Capital Command, took shape in São Paulo during the early 1990s, …

Current Russian Military Influence In Africa

This is a scary map of current Russian military influence in Africa:

As one can clearly see Russia has formed an almost complete arc of military influence from Egypt to Nigeria to Madagascar! I wonder, whether the former Soviet Union had more military influence on African states than Russia today!

More on this subject in the AEI Africa File

Not To Use The Debt Ceiling As Political Bargain Is A Mistake

Sometimes The AEI Is Dead Wrong!

In a recent article, the American Enterprise Institute argued in a recent article titled “Using the debt ceiling as a political pawn is bad for America”, which is not very convincing.

What Is At Stake?

The federal debt is definitely way too high. The entire world is watching the inability of the current Administration and the U.S. Congress to reduce spending and to lower debt with distress. The political leadership in Washington, DC has no inclination to promote economic growth by getting big government out of the way instead they prefer to strangulate the economy.

The Republicans in Congress have blinked and gained nothing!

Emancipation Proclamation 150 Years Later

Posted: 1/4/2013

Trigger

The American Enterprise Institute published a paper by John Yoo titled “The Emancipation Proclamation's unforgettable lesson about presidential power”. The article e.g. emphasized following excerpt “The link between the Emancipation Proclamation and Lincoln’s broad view of presidential power should cause us to reflect on current controversies over the executive.”

Some Reflections On The American Civil War

Was the American Civil War really worth fighting for? Over 750,000 soldiers and a still undetermined number of civilians died because of this Civil War.

The balance of power of states vs. central government was permanently shifted towards the federal government; it was demonstrated that the Commander in Chief could subdue any state or group of states if necessary and so on.

What If Or Lessons Learnt

What would have happened if the Union had only defended against any attacks by the Confederacy instead of an all out war to defeat the rebellious Confederacy? What would have happened had the Union just ignored, but not accepted the secession of the Confederacy?

Would it not have been much cheaper in treasure and blood to just to buy off slaves from southern states? We know in hindsight that the Civil War did not end racism, which would take another 100 years and more.

Slavery Was Already Nearing Historical Extinction

Slavery would have been phased out over time anyway with or without the Civil War. Brilliant men like Abraham Lincoln should have been aware of that. Whether, the Civil War expedited this phase out is debatable and at what cost.

The Vermont constitution of 1777 was the first document in the United States to abolish slavery.

In 1807 the British abolished the slave trade with their colonies. In the Caribbean, slavery was abolished by British Parliamentary fiat, effective July 31, 1834, when 776,000 slaves in the British plantation colonies were freed and so on and so on.

It was only a matter of time …

What’s Really Not Behind The Entitlement Crisis

What Is This About?

On the Opinion page of the US Edition of The Wall Street Journal was an article published on 7/15/12 headlined “What’s Really Behind theEntitlement Crisis” (subscription required) by Ben J. Wattenberg with the American Enterprise Institute.

All Alarm Bells Started Ringing

“Entitlement Crisis” made me curious. However, if someone claims to tell you “What’s Really Behind” something then my alarm bells start ringing immediately. What is the author selling, e.g., snake oil, cheap analysis etc.?

Abstract Of Article

Wattenberg bases his explanation on demography. “[The] heart of the problem are birth rates … total fertility rates … that have fallen sharply all over the world”. Thus, “there will be relatively few working age people to underwrite the benefits of the many seniors who have paid into national retirement systems such as Social Security and Medicare”. Nothing new here. This has been well known for decades.

However, then the author discusses so called “pro-natal” (According to Wikipedia also known as Natalism or a belief that promotes human reproduction) programs that were in particular employed in Western Europe to increase total fertility rates. Wikipedia again: “It [pro-natal] typically advocates policies such as limiting access to abortion and contraception, as well as creating financial and social incentives for the population to reproduce.”. He admits that the actual effects of such programs are hard to quantify.

Further, the author argues that “[i]n theory, pro-natal programs are the best bet”. As he hopes it would perhaps be “reflating fertility”.

Another Look At The Entitlement Crisis

First, I think, the author is quite wrong to believe that promoting the total fertility rate to go up again is a solution. The worldwide, decades long trend for TFR is downward towards 2 or below for good and well understood reasons. Thus, pro-natal policies are an exercise in futility. These demographic trends probably have to be accepted. In the following decades, the human approach to procreation may dramatically change anyway thanks to advances in medicine and genetics etc.

Second, the author implicitly presumes that big government pay as you go entitlement programs like Social Security are a given and are desirable. He is wrong on this too. It is high time to get big government out of the way to provide one size fits all retirement benefits for the whole population. Pay as you go national retirement systems are akin to Ponzi schemes. Such systems are but huge power grabs by big government. In recognizing this lies a much better solution to the entitlement crisis: individual self reliance in form of personal retirement savings. The earlier we get young people to accept this form of responsibility, the better. Once implemented, total fertility rates become much less relevant.

Post Mortem Economists At The Federal Reserve Board

The Fed Employs Hundreds Of Economists

The Fed has three research Divisions employing about 450 staff members of which about half are PhD economists. What were all these economists doing while the latest financial bubble evolved and expanded and the Fed kept key short term interest rates at recklessly low levels for too long? Was this a case of analysis paralysis by too many economists? J

In my opinion, so many highly paid economists are a waste of tax payer’s money! I suspect a serious case of overstaffing at tax payers’ expense.

Brilliant Post Mortem Analysis Of Financial Crisis By Fed Economist

The AEA (American Enterprise Institute) just published a brief review titled “Beware of predatory lenders? No, fear predatory borrowers” (by Economist Sita Nataraj Slavov) of a research paper co-written by one of the Fed’s senior financial economists titled “Complex Mortgages”(53 pages long). His name Gene Amromin. This senior economist has been working for the Fed since 2005 according to his bio on the Chicago Fed’s website. Interestingly, this senior economist is not listed among the 450 staff members mentioned above on the Fed’s website, leading me to believe that perhaps the regional Fed’s have their own staff of economists.

One notices already the differences in how these two economists label their papers. The Fed economist is hiding something, because this paper is very insightful which the review brings out clearly.

Here is a large excerpt from the abstract of the research paper (it speaks of itself, emphasis added):

“We find that complex mortgages are used by households with high income levels and prime credit scores, in contrast to the low income population targeted by sub-prime mortgages. Complex mortgage borrowers have significantly higher delinquency rates than traditional mortgage borrowers even after controlling for leverage, payment resets, and other household and loan characteristics. Our analysis of dynamic default patterns, bankruptcy filings, and household characteristics suggests that complex mortgage contracts attract sophisticated borrowers who are more strategic in their default decisions.”

This is a very nice post mortem analysis. Same Fed economist wrote at least one other paper in October 2010 also dealing with some specific post mortem analysis.

In another post mortem paper titled “Predatory Lending and the Subprime Crisis” published on 3/16/2012 same Fed senior economist writes in its abstract that “Our results suggest that predatory lending may have not been instrumental in precipitating the financial crisis as often believed.”.

Clueless Fed Economists

I apologize to pick on Senior Financial Economist Gene Amromin with the Chicago Fed. However, one can look at his list of publications by title only and you find none that would perhaps criticize the recklessly low interest policy of the Fed in the first decade of the 21^st century. None of his paper dealt with the absurd lending standards that were allowed to go on in this decade leading up to the severe financial crisis of 2008 and so on.

I suspect he is not the only senior economist at the Fed who missed the signs.

Ben Bernanke maybe the most clueless of them all.

Maybe one day someone else will study in more detail what these hundreds of Fed economists have written prior or during the severe financial crisis of 2008.