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Welcome to the Center for Popular Economics' Econ-Atrocities (EAs) and Econ-Utopias (EUs), short briefs on economic issues that both outrage and inspire. These EAs and EUs are distributed by email every two weeks. If you would like to subscribe (or unsubscribe), please go to http://www.populareconomics.org/site_files/subscribe.html
Econ-Utopia: The Northeast’s Regional Greenhouse Gas Initiative
This morning's reports on French President Chirac's statement that, according to the NYTimes,
“what is dangerous about this situation [Iran acquiring a nuclear bomb] is not the fact of having a nuclear bomb,” he said. “Having one or perhaps a second bomb a little later, well, that’s not very dangerous.There's no doubt that this represents lame politics on Chirac's part, since, if this is his true belief, he shouldn't have been suggesting otherwise before now (or after, with his bungled attempts at retraction).
“But what is very dangerous is proliferation. This means that if Iran continues in the direction it has taken and totally masters nuclear-generated electricity, the danger does not lie in the bomb it will have, and which will be of no use to it.”
Mr. Chirac said it would be an act of self-destruction for Iran to use a nuclear weapon against another country.
“Where will it drop it, this bomb? On Israel?” Mr. Chirac asked. “It would not have gone 200 meters into the atmosphere before Tehran would be razed.”
I don't think that Tim Haab at Environmental Economics subscribes to the Econ-Atrocities, but by happy coincidence he's written a blog post that would fit perfectly in the series. His topic is the Mexican government's response to serious inflation in the cost of tortillas, which are a primary staple of the Mexican diet, and poor Mexicans (of which there are plenty) are getting hit by these price hikes like a punch to the gut. Should the Mexican government pursue a policy of price caps for tortialls? The "Theory of the Second Best" offers an interesting angle of analysis. I'll let Tim explain it himself, but as a teaser here's a bit of his conclusion:
If the price cap is a response to another inefficient policy, then the price cap may actually improve efficiency. The first best solution would be to remove the policies creating the inefficiently high corn prices. The second best solution might be to create a new policy to counteract the effects of bad policy. That's the Theory of Second Best.
Econ-Utopia: Greenbacks for Green Energy
Econ-Atrocity: The 800-Pound Ronald McDonald in the Room
Any present or past President has got to be used to being scorned, so the hue and cry now erupting over Jimmy Carter's new book on the Israeli-Palestinian misery can't be terribly surprising for him. I haven't yet had a chance to read the book and so am not in a position to endorse or reject or somewhere-in-the-middle it. Still, some of the reaction is so clearly based on attacking Carter himself, rather than the content of his book--indeed it seems to be attacking Carter instead of attacking his arguments--and that's just plain wrong. An example.
Bartesch's family and 'supporters,' seeking special relief, launched a campaign to discredit OSI while trying to garner political support. Indeed, OSI received numerous inquiries from members of Congress who had been approached. After we explained the facts of the case, however, the matter inevitably was dropped; no one urged that Bartesch or his family be accorded any special treatment.
In September 1987, after all of the gruesome details of the case had been made public and widely reported in the media, I received a letter sent by Bartesch's daughter to the former president.... I was ... taken aback by the personal, handwritten note Jimmy Carter sent to me seeking "special consideration" for this Nazi SS murderer. There on the upper-right corner of Bartesch's daughter's letter was a note to me in the former president's handwriting, and with his signature, urging that "in cases such as this, special consideration can be given to the families for humanitarian reasons."...
As disturbing as I found Carter's plea, and although his attempted intervention has always gnawed at me, I chalked it up at the time to a certain naivete on the part of the former president. But now, in light of Carter's most recent writings and comments, I am left to wonder whether it was I who was naive simply to dismiss his knee-jerk appeal as the instinctive reaction of a well-meaning but misguided humanitarian.
...
The exposure of Carter's views on Israel and the Jewish lobby has shed a clearer light on his attempt to influence me in the Bartesch case. We know from his own confession that he has had lust in his heart. Unfortunately, he has given us ample reason to wonder what else is lurking there.
When Rabin, who had come to despise what the occupation was doing to the citizenry of his own country, was sworn in as prime minister, the leaders of these American Jewish organizations, along with their buffoonish supporters on the Christian right, were conspicuous by their absence. On one of Rabin's first visits to Washington after he assumed office, according to one of his aides, he was informed that a group of American Jewish leaders were available to meet him. The surly old general, whose gravelly cigarette voice seemed to rise up from below his feet, curtly refused. He told his entourage he did not have time to waste on 'scumbags.'
Econ-Atrocity: The High Cost of the Holidays