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Wednesday, November 1, 2017

Social Harmony and Toxic Chemicals in China

According to the New York Times in 2012, the Chinese had become increasingly willing “to take to the streets despite the perils of openly challenging the country’s authoritarian government.” Even more surprising, government officials had actually acquiesced in some notable cases. Given the raw nature of power, particularly under authoritarian auspices, revolution rather than gradual reform may still be the most likely means by which democracy can bloom under the golden, albeit hazy, sun.

The full essay is at "Chemical Pollution in China."

Absolute Sovereignty: The Case of Syria

By the end of 2012, over 60,000 Syrians had been killed and over half a million had fled as a result of the civil war in Syria. Shortages of food and shelter were worsening inside Syria for civilians. In early January of 2013, a spokesperson for the U.N. said that the international organization was unable to feed a million residents in combat zones. Acute fuel shortages in Syria were contributing to the rising price of bread—at least six times greater than the pre-conflict price. Additionally, an outbreak of violence in a large Syrian refugee camp of 54,000 refugees in Jordan amid a winter storm was reported. “The incident followed a night of heavy storms, during which torrential rains and high winds swept away tents and left parts of the camp flooded,” an official in Save the Children said in a statement. One might ask what was really behind the deteriorating conditions.

California’s Turnaround in 2013: Brown’s Budget Surpluses

By early 2013, California had turned the corner from deficits—$9 billion in 2011 and $25 billion in 2010—to anticipated surpluses—$785 million for the fiscal year ending June 2013 and $851 million in the year thereafter. The lack of balance between billions and millions suggests that Keynesian economics may contain a fundamental imbalance in favor of consumption, at least in a democratic context. The prudent proposals by Jerry Brown, California’s head of state and chief executive, point to the ability of a republic to responsibly manage its fiscal business even within the overall imbalance.
The full essay is at "California's Turnaround."

Political Risk Exaggerated on Catexit

On the day the Catalan parliament voted in favor of “Catexit” from Spain, the IBEX-35 stock-market index dropped 1.4 percent while the Stoxx Europe 600 gained 0.3 percent.[1] The IBEX-35 is an stock-index of companies based in Spain. Investors also sold state bonds; yields on 10-year bonds rose to 1.574% from 1.558. Even though these changes were hardly earth-shattering in magnitude, their directionality points to investor-anxiety. I submit that it was overblown, which suggests that investors generally tend to over-react to political events.

The full essay is at "Catexit: Political Risk."

[1] Jon Sindreu, “Stocks, Bonds Hit by Political Unrest,” The Wall Street Journal, October 28-29, 2017.