Coming Home, Voodoo Monetarism, China's Deadly Export, Catataxis, Immigration Good, Fair Country

Over time we are hopeful the fact that Canadian citizen Omar Khadr was the last person with the citizenship of a Western liberal democracy to be released from American custody and brought home -- in chains or otherwise -- from Guantánamo Bay will be remembered as shameful.

Most polls show that Canadians are divided on whether Omar is a vicious terrorist or the unfortunate victim of a bad father and vindictive superpower that lost its moral bearing.

He was a child and that is all that matters when justice came calling.

Shame on Canada.

A sample of commentary on Omar Khadr's deal to come home, more on QE2 -- voodoo monetarism or smart monetary policy? --,  seems China may have been the source of Europe's great plagues, John Donald's website, more evidence of the good work immigration does, and a wonderful history lesson about American politics in 1910.

The Canadian Supreme Court decision of January 2010.

The appeal is allowed in part.  Mr. Khadr’s application for judicial review is allowed in part.  This Court declares that through the conduct of Canadian officials in the course of interrogations in 2003-2004, as established on the evidence before us, Canada actively participated in a process contrary to Canada’s international human rights obligations and contributed to Mr. Khadr’s ongoing detention so as to deprive  him of his  right to liberty and security of the person guaranteed by s. 7 of the Charter, contrary to the principles of fundamental justice.  Costs are awarded to Mr. Khadr.  http://csc.lexum.umontreal.ca/en/2010/2010scc3/2010scc3.html

The Globe and Mail thinks it shows the US in a bad light. Actually it shows Canada in a worse light.

The United States’ failure to recognize the lesser culpability of juveniles, at every stage of the incarceration and trial of Canadian Omar Khadr, shows that country’s military-justice system in a poor light. http://www.theglobeandmail.com/news/opinions/editorials/the-wrongful-prosecution-of-omar-khadr/article1779980/

New York Times reports on the deal that will get Omar home. The headline says much.

A United States military commission at Guantánamo Bay has sentenced a former child soldier for Al Qaeda to 40 years in prison for war crimes — but he might be released in less than three years, the Defense Department said.   http://www.nytimes.com/2010/11/02/us/02detain.html?_r=2&nl=todaysheadlines&emc=globasasa210

Lorne Gunter thinks that Khadr's lack of remorse condemns him to treatment as an adult and under the supervision of the United States.

I can work up no genuine concern for Omar Khadr -- nor, conversely, any real animosity. In this regard, I think I am like a lot of Canadians.   http://www.nationalpost.com/jihadi+leaves+cold/3732280/story.html

Then there is another view expressed by the same newspaper Gunter writes for that champions liberty comparing US military trials at Guantánamo Bay with Joseph Stalin's show trials.

In the 1930s ... http://www.nationalpost.com/Stalin+would+have+been+proud/3737862/story.html

Human Rights advocates detail the charges against Omar Khadr.

Canadian citizen Omar Khadr is an alleged (ed's note -- now guilty) child soldier detained by U.S. forces in Afghanistan in July 2002 and transferred to the Guantánamo Naval Base in October 2002 at age 15.    http://www.humanrightsfirst.org/us_law/detainees/cases/khadr.aspx

Why liberty is the greatest defence against terrorism particularly since it represents from an historical perspective such a tiny, tiny, tiny, tiny threat to life and property compared to the threats that the German-Japanese axis (1939-1945) and the Soviet Union (1947-1989) posed to our civilisation. Some perspective please. Just because we have the surveillance technologies to enslave ourselves does not mean we have to use them.

Alas so, even though on the great Toner Cartridge Plot, Dan Drezner gets it right. http://www.spectator.co.uk/alexmassie/6433709/so-you-think-civil-liberties-are-important-eh-thats-why-youre-a-terrorist.thtml

Quote worth quoting.

"We too can keep an eye on the long haul and recognise that, big, medium or tiny picture, we're not losing. We spent 30 years dealing with Irish terrorism and another 45 monitoring the Cold War: we're not actually strangers to long, strange, complicated security problems. And if the nature of western society is such that we will always retain some vulnerability to terrorism we also bring great strengths to the struggle and, for that matter, considerable resources too." -- Alex Maisse

Jeremy Warner on the dangers of voodoo monetarism.

What happens, as seems more likely, if there isn't one? The answer is that an awful lot of people are going to lose an awful lot of money.   http://www.telegraph.co.uk/finance/comment/jeremy-warner/8103079/US-Federal-Reserves-latest-bubble-threatens-mayhem.html

But so far the evidence is that QE2 is doing what it is supposed to, weaken the dollar, and make asset prices.

Krugman counters Beckworth’s suggestion that quantitative easing worked during the Great Depression. http://modeledbehavior.com/2010/11/01/escaping-from-the-trap/

Even Doom and Gloom Marc Faber is mildly bullish on equities. (ed's note -- 7 minute video).

http://www.ritholtz.com/blog/2010/11/marc-faber-on-bloomberg-qe2/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+TheBigPicture+%28The+Big+Picture%29  (ed's note -- Hat Tip, Big Picture)

Particularly if the Fed can manage expectations about inflation. 

Here is why I think QE will pack an economic punch, if done correctly.  http://macromarketmusings.blogspot.com/ 

No evidence of a liquidity trap either, 'a shaggy dog'.

A few people have been asking me about this, so here is a summary statement of some points.   http://www.marginalrevolution.com/marginalrevolution/2010/11/why-i-assign-less-weight-to-the-liquidity-trap-argument.html

Still, for every action there is a reaction. Like a bond bubble.

Gary Lieb can barely stand it.  http://www.ft.com/cms/s/0/d7abb7c2-e51d-11df-8e0d-00144feabdc0.html

Particularly since monetary policy is only part of the equation.

There are upbeat expectations for US “QE2”. The hope is that quantitative easing will force long term interest rates to truly abysmal levels, encouraging companies to seek returns via capital spending.   http://www.ft.com/cms/s/0/f72e7b02-e5d1-11df-af15-00144feabdc0.html?ftcamp=rss&ftcamp=crm/email/2010112/nbe/Comment/product

Meanwhile in the European bond markets surrealism prevails.

Like a Halloween party hangover, the European sovereign bond market is feeling little chills and sweats following the weekend's EU pact on fiscal governance. You will recall that Germany struck a deal with France to modify the EU Treaty and create a permanent mechanism for dealing with troubled EU sovereign debtors.  http://www.theglobeandmail.com/report-on-business/economy/economy-lab/carl-mortished/bond-market-realism-no-longer-in-fashion/article1782008/

Just accept it. The US economy is going through a structural downturn and employment levels will take a decade to return to post-recession levels.

An economy growing 2 percent a year might be tolerable in normal times. Today, it's a near-disaster.   http://www.cbsnews.com/stories/2010/11/01/ap/business/main7010576.shtml

Damn China.

The great waves of plague that twice devastated Europe and changed the course of history had their origins in China, a team of medical geneticists reported Sunday, as did a third plague outbreak that struck less harmfully in the 19th century.   http://www.nytimes.com/2010/11/01/health/01plague.html?src=ISMR_AP_LO_MST_FB

 

 

A bubonic plague smear.

I recently reconnected -- as only you can in the second decade of the 21st century -- with John Donald who I worked with at Jardine Fleming in Tokyo, Japan from 1990-1993.

He was a boy wonder then running the equity research department at some ridiculously young age with a kind of authority that a British university education and growing up in the home of the British Ambassador to China gives you.

He has great website that is worth revisiting. His comments on the difference between working in a big and small company are typical of how he cleverly puts things.

What is Catataxis? It is the confusion between levels. It is a disorder of magnitude. http://www.catataxis.com/?page_id=47

Immigrants displace tasks not people. More on immigration good.

Despite popular belief, often based on anecdotes and bodged analysis, there is hardly any evidence that immigrant workers have a negative effect on the wages of native workers (see for instance Card 2009 and Glitz 2007) or that they crowd-out other jobs in the US (Card and Di Nardo 2000) or Europe. On the contrary, some authors emphasise the existence of a potentially positive effect of immigrants on the demand for native workers (Manacorda et al. forthcoming).  http://www.voxeu.org/index.php?q=node/5729

Quote worth quoting.

"This new type of analysis of the labour market impact of immigration paints a much more differentiated picture in which “tasks”, not workers, are replaced by immigrants in the production process. Hence natives may have an opportunity to move into tasks that pay better, are complementary to manual jobs, and in which they have comparative advantages. This virtuous mechanism, however, will take place only if native workers are mobile enough to change occupation and adjust to the new organisation of production" --  Francesco D'Amrui and Giovanni Peri

Historian Ed Morris on a different kind of Tea Party in 1910 where Teddy Roosevelt reminded Americans about fairness.

THE past may be a foreign country, as L. P. Hartley famously observed, but at least one of its landscapes — the political scene on election eve, a century ago — looks familiar to this time traveler.   http://www.nytimes.com/2010/11/01/opinion/01morris.html?hp

Quote worth quoting.

"One of the chief factors in progress is the destruction of special privilege. The essence of any struggle for healthy liberty has always been, and must always be, to take from some one man or class of men the right to enjoy power, or wealth, or position, or immunity, which has not been earned by service to his or their fellows." -- From Pdf below, 'The New Nationalism Teddy Roosevelt'.

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Twin Virtues

Ultimately, the most successful societies find the balance between the twin virtues of inequality of outcomes and equality of opportunity.

The new politics must marry the twin virtues of unequal outcomes and equality of opportunity.

When too few get too much everybody loses.

Feminism is about women living their lives on their own terms, marshaling the resources of the society to make that possible, and men embracing this as vital to a successful society and their own liberation.

Can it be that striving for equality of opportunity however imperfect the process not only benefits the individual but also creates benefits for the society that are unintended but wonderful?

Economics must be a 'moral enterprise' as much as politics claims to be. Economic outcomes need to be framed in terms of right and wrong not just efficiency if only because these often align in surprising ways that are good for society and the economy.

My vision of Canada is that any Canadian child from a family of limited circumstance can expect to have a chance at lifetime of unlimited opportunities.

Tax policy should be founded on the principle of generating steady tax revenues sufficient to maximise environmentally sustainable economic growth in order to fund fair government.

Public policy should be designed to decrease inequality before the law and increase equality of opportunity.

Capitalism is not the problem; the problem is what we do with capitalism.

Content is always more difficult to argue than conspiracy.

Let the state regulate and the market operate (most things).

Welfare strategies are best designed as a hand up, not as a hand out.

Political debate should not be fact free fighting.

Explanation lasts longer than eloquence.

Always favour empowerment over dependency.

The most enduring public figures are embraced for the causes they fought for and not the concept of themselves they hoped others would remember them by.

Find your voice and don't be the echo of somebody else.

It is possible to operate on two different levels: the practical, cautious and conservative; and the realm of ideas, open, free, and radical.