Financial Markets and the Economy

FROM GREAT DEPRESSION TO GREAT CREDIT CRISIS: SIMILARITIES, DIFFERENCES AND LESSONS.  Miguel Almunia, Agustın Bénétrix, Barry Eichengreen, Kevin H. O’Rourke and Gisela Rua, Economic Policy, April 2010, pp. 219–265. The Great Depression of the 1930s and the Great Credit Crisis of the 2000s had similar causes but elicited strikingly different policy responses. While it remains too early to assess the effectiveness of current policy, it is possible to analyse monetary and fiscal responses in the 1930s as a natural experiment or counterfactual capable of shedding light on the impact of current policies. We employ vector autoregressions, instrumental variables, and qualitative evidence
for 27 countries in the period 1925–39. The results suggest that monetary and fiscal stimulus was effective – that where it did not make a difference it was not tried. They shed light on the debate over fiscal multipliers in episodes of financial crisis. They are consistent with multipliers at the higher end of those estimated in the recent literature, and with the argument that the impact of fiscal stimulus will be greater when banking systems are dysfunctional and monetary policy is constrained by the zero bound. READ MORE

CAN WELFARE STATES BE SUSTAINED IN A GLOBAL ECONOMY? LESSONS FROM SCANDINAVIA. Eric S. Einhorn, John Logue, Political Science Quarterly, Spring 2010, pp. 1-29. The last 20 years have not been kind to the “European social model,” that is, the inclusive welfare states of Western Europe that protected the vulnerable and provided extensive guarantees to working people. Universal and largely free health care, good pensions, paid vacations, sick leave, job security, free higher education, and the rest of the European social model are attractive to European citizens. They are a source of social protection for the individual and of social cohesion for European societies. Indeed, the European social model is a major source of legitimacy for the whole European Union (EU). But many economists hold the model to be too inflexible and too expensive for the dog-eat-dog world of the post-Cold War period. Moreover, the “Great Recession” of 2008 has savagely impacted Europe and changed at least the short-term economic prospects for social policies. The new economic “world is flat,” as Thomas Friedman says, and the rising tide of products and services from low-wage producers in China and India, ordered
by large Western multinationals, threatens to swamp the industrial high-wage, high-benefit workers and plants of the United States and Europe and the welfare state programs that depend on them. Financial resources and services are global, but so are the crises. Globalization continues, but under very different geopolitical and policy premises. READ MORE

Internet - Free Speech- Journalism - Democracy

DEMOCRACY AND DEEP DIVIDES. Nathan Glazer, Journal of Democracy, April 2010, pp. 5-19. "How do democracies deal with the deep divisions created by race, ethnicity, religion, and language? The cases of Canada, India, and the United States show that democratic institutions—notably, competitive elections and independent judiciaries—can bridge divides and build stability, but they must find a way to manage the tension between individual and group equality." READ MORE

"RIPPLE EFFECTS" IN YOUTH PEACEBUILDING AND EXCHANGE PROGRAMS: MEASURING IMPACTS BEYOND DIRECT PARTICIPANTS. Julie Cencula Olberding and Douglas J. Olberding, International Studies Perspectives, February 2010, pp. 75-91. "A number of organizations have a mission of encouraging peace throughout the world by enhancing young people's knowledge and understanding of other countries and cultures. One strategy used to further this mission is international or intercultural exchange programs. Most evaluations of exchange programs gather data only from the direct participants who traveled to another country. But these programs have the potential to have impacts that expand beyond the direct participants—or "ripple effects." Thus, a more appropriate methodology to evaluate exchange programs is "360-degree feedback," which gathers data from multiple sources. This study uses 360-degree feedback to evaluate a youth peacebuilding and exchange program by gathering data not only from the exchange students but also from chaperones, host families, and students and teachers in the host school. ANOVA analyses finds that the program had positive impacts on the exchange students and, in many cases, even greater ripple effects on indirect participants." READ MORE

AUTHORITARIANISM VS. THE INTERNET. Daniel Calingaert, Policy Review,  April/May 2010, pp. 63-75. In the heady days following the disputed June 12, 2009, presidential election in Iran, images of protests against election fraud were captured on mobile phone cameras and sent via the internet by ordinary citizens to the outside world. While reporters from major international media were forced to leave the country or were holed up in their hotel rooms, short messages sent by Twitter and videos posted on YouTube filled the gap in information. Thus, at a time when the Iranian government was trying to hide the protests from television and newspaper reporters, the internet provided a window for audiences outside the country to see what was going on inside and gave Iranians a way to tell the world at large what was happening to them.  The internet in Iran is, however, subject to harsh controls, just as other walks of life are. Government restrictions on bandwidth make uploads of photos and videos very slow. Transmissions of text messages on mobile phones were blocked for three weeks following the June 12th presidential election, and government disruption of social networking sites such as Facebook further impeded the ability of Iranians to share information and to organize protests. Moreover, the government has conducted surveillance on internet communications, and that surveillance may have contributed to the arrests of dissidents. READ MORE  

REPRESSION GOES DIGITAL. Joel Simon, Columbia Journalism Review, March/April 2010, var. pp. The Internet provides avenues for journalism and free speech, but it has also become a chokepoint for free press as oppressive governments exploit vulnerable areas in the information environment.  Iran, Burma, China, Vietnam and Tunisia are governments which deny Internet access, practice censorship, or use monitoring technology to identify and persecute activists; Nokia Siemens, a Finnish-German joint venture, has sold Iran such technology.  The author lauds Google’s recent stand in China to refuse to comply with government censorship.  Broad international coalitions of journalists and others -– including governments -– concerned about press freedom are important to maintain pressure on repressive governments to ensure dissident voices continue to be heard. READ MORE

NEWS & THE NEWS MEDIA IN THE DIGITAL AGE: IMPLICATIONS FOR DEMOCRACY. Herbert J. Gans, Daedalus, Spring 2010, pp. 8–17.  Modern American journalism considers itself a “bulwark of democracy.” Journalists argue that they report the news so that the citizenry can inform itself and participate in the “conversation” that journalists believe is crucial to a democracy. According to what might be called bulwark theory, being informed also enables citizens to participate in politics, choose their political representatives, and instruct them on how they want to be represented. The theory expresses journalism’s
noblest democratic ideals, but it could stand some rethinking. Being informed is neither a motive nor a requirement for talking about or participating in politics. How well most citizens are informed is a debatable question, and since politics is a divisive conversational topic, precious few participate in the democratic conversation. Some citizens do, but some of them shout and scream. In reality, most political conversing, including that which is heard by elected of½cials, comes from journalists, commentators,
panel talk shows, and journalist bloggers. And it is the news media themselves that offer up the public outlet for this continuing conversation. READ MORE

U.S. Society & Values

RELIGION, DIVORCE, AND THE MISSING CULTURE WAR IN AMERICA.  Mark A. Smith, Political Science Quarterly, Spring 2010 , pp. 57-85. In his speech to the Republican National Convention in 1992, Patrick Buchanan seized the pulpit to proclaim that Americans were fighting an intense culture war. This was a struggle “for the soul of America,” Buchanan declared, “as critical to the kind of nation we will one day be as was the Cold War itself.” Just a year earlier, sociologist James Davison Hunter had written of a culture war waged between those with orthodox and progressive worldviews. 2 With one side believing in a fixed and transcendent authority, and the other invoking human reason as the guide to morality, conflict invariably engulfed a range of political issues. Considering the context of incendiary debates over public funding for the arts, the legality of abortion, civil rights for gays and lesbians, and teaching evolution in public school classrooms, Hunter's analysis seemed an accurate description of American politics in the 1980s and 1990s. Subsequent research by social scientists, however, cast doubt on that vision of America as marked by contentious battles between contending worldviews. Surveys and interviews revealed the American public to be far less divided, even on controversial issues like abortion and homosexuality, than the culture war metaphor would predict. READ MORE

AMERICA INSECURE: CHANGES IN THE ECONOMIC SECURITY OF AMERICAN FAMILIES. Gregory Acs, and Austin Nichols. The Urban Institute. Web posted March 24, 2010, var. pp. This paper synthesizes findings from a series of Urban Institute reports produced under the "Risk and Low-Income Working Families" research initiative funded by the John D. and Catherine T. MacArthur and Annie E. Casey Foundations. The paper places this research in the broader context of literature on economic mobility and income volatility. The report is structured around two key questions: (1) How have economic instability and insecurity changed for America's low-income working families changed over time? and (2) What are the factors that contribute to or offer protection from substantial income losses and promote or inhibit recoveries from such losses?. Gregory Acs and Austin Nichols are both Senior Research Associates in The Urban Institute's Income and Benefits Policy Center. READ MORE

BEATING OBESITY. Marc Ambinder, The Atlantic, May 2010, var. pages. "By 2015, four out of 10 Americans may be obese. Until last year, the author was one of them. The way he lost one-third of his weight isn’t for everyone. But unless America stops cheering The Biggest Loser and starts getting serious about preventing obesity, the country risks being overwhelmed by chronic disease and ballooning health costs. Will first lady Michelle Obama’s new plan to fight childhood obesity work, or is it just another false start in the country’s long and so far unsuccessful war against fat?" READ MORE

REVISING NO CHILD LEFT BEHIND: CAN OBAMA'S BLUEPRINT FIX BUSH'S EDUCATION POLICIES? Kenneth Jost, The CQ Researcher, April 16, 2010, pp. 337-370.  "President Obama is proposing a substantial overhaul of the No Child Left Behind Act, the controversial centerpiece of George W. Bush's educational policy. Both liberal and conservative critics say the eight-year-old law has hurt education by overemphasizing standardized tests and unfairly labeling schools as underperforming without providing help to improve. Obama wants to focus federal enforcement on the lowest-performing schools, which could be required to fire staff, convert to charter schools or close altogether. He also wants to hold teachers more accountable for student performance. State policymakers and many experts are welcoming the proposed changes, but the powerful teachers' unions say firing teachers is unfair and ineffective in raising student achievement. Obama also wants states to adopt national 'core standards' developed by the states' governors and education chiefs." READ MORE