Katherina Pister’s comments at VOX

Checking Dani Rodrik’s blog I’d noticed a new post that’s really pretty sharp. First, Dani had noticed an interesting post at Vox’s Global Crisis Debate by Katherina Pistor.  I liked Katherina Pister’s post  at Vox too.  In fact, I’d say that Dani actually underestimates the potential of the thinking that underlies that post.  The key excerpt:

The major argument against standardization as the cure all for financial crisis, however, is not that the wrong model was chosen. Nor is it the most common critique of legal standardization, namely that one model does not fit all. Instead, the idea that effective market regulation can be achieved by standardizing rules and regulations on the most successful model at the time is deeply flawed for the following reasons. First, it treats legal institutions as endowments and ignores the need for maintenance and adaptation not only to local conditions, but also to future change. Second, it creates the illusion that a given market is institutionally sound and thereby disguises problems that may trigger future crises. Third, the selection of ‘best practice’ models tends to reward regulatory regimes based on simple quantitative outcome variables, such as market size, even when market size may be the product of a bubble, while ignoring volatility and other risk factors.

So here’s my response to Dani (cross-posted over at his excellent blog also):

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Katherina Pister’s comments at VOX

Not yet, Mr. Wright

Well, Mr Wright, what would you do with the city of Detroit?

“Abandon It”

But not yet:

In the Capital of the Car, Nature Stakes a Claim
By KATE STOHR
Published: December 4, 2003
PAUL WEERTZ lives less than 10 minutes from downtown, but the view from his window is anything but urban. On a warm day this fall, the air was ripe with the smell of fresh-cut hay and manure. In the alley behind his house, bales of hay teetered and listed where garbage cans once stood. Chickens scratched in the yard, near a garage that had been turned into a barn. Mr. Weertz drives a Ford — not a sleek sedan but a rebuilt 1960 tractor.

”My sisters and brothers gave me a pig for my birthday,” Mr. Weertz said, referring to his newest barnyard resident. ”I am not sure what I am going to do with it.”

After decades of blight, large swathes of Detroit are being reclaimed by nature. Roughly a third of this 139-square-mile city consists of weed-choked lots and dilapidated buildings. Satellite images show an urban core giving way to an urban prairie.

Not yet, Mr. Wright

Horrified by the “personal venom” ?

Well, since the Brazilian trade representative started comparing the methods used by advocates of the Global Trading regime to those used by Joseph Goebbels, the Nazi propaganda chief, the office U.S. trade representative has expressed their shock:

Sean Spicer, spokesman for the Office of the U.S. Trade Representative, said he was horrified by the “personal venom” of Amorim’s words.

“We came here to Geneva to negotiate on substance,” Spicer told The Associated Press. “For him to make remarks like this is so incredibly wrong. They are insulting.”

I won’t ever advocate comparing the office of the US trade representative to Nazi’s. But let’s keep a little perspective here and understand why the office of the US trade Representative is so hated. While yes, I am shocked by the personal venom of these attacks I am a little more shocked by the billions starving as a result of globalization. Only when the USA understands why we are becoming more disliked will we be empowered to do something about it.

Horrified by the “personal venom” ?

Maybe Economists should listen to Anarchists, Artists and Architects more often

Well, I am glad Harvard economists are finally getting around to saying something about the death of the globalization consensus. One of the things I think about when I read this is: finally! But it’s very bittersweet as the economic future does not look at all too bright. So even though others have been questioning what’s going on, including the art department of the Economist (way ahead of the writers BTW), I have to ask: What is their program for the future?

Of course, after reading Dani’s article, a logical question would be: Is there a violent anarchist over at work in the Economist’s Art department? I’d very much like the hear from her or him.

Another side note: as much as I like Project Syndicate, it is driving me crazy that they do not date their articles. HELP! Apparently, their commentary has risen above time and space, into an inter-dimensional limbo, in which just pure commentary can exist, outside of any context. Even a a year, or season (e.g.: Spring 2006) would help quite a lot IMHO.

Dani Rodrik states the obvious over at Project Syndicate:

The death of the globalization consensus
That is the title of my new column for Project Syndicate. Here is an extract:

There was a time when global elites could comfort themselves with the thought that opposition to the world trading regime consisted of violent anarchists, self-serving protectionists, trade unionists, and ignorant, if idealistic youth. Meanwhile, they regarded themselves as the true progressives, because they understood that safeguarding and advancing globalization was the best remedy against poverty and insecurity.

But that self-assured attitude has all but disappeared, replaced by doubts, questions, and scepticism. Gone also are the violent street protests and mass movements against globalisation.* What makes news nowadays is the growing list of mainstream economists who are questioning globalisation’s supposedly unmitigated virtues.

* Oh really–perhaps someone forgot to translate that memo into Pakistani? or Italian for that matter.

Maybe Economists should listen to Anarchists, Artists and Architects more often

Walmart, growth visualization

From Flowing Data, an interesting use of Modest Maps:

Hat Tip: Chris Blattman’s wonderful, smart as hell blog about development which I had browsed before but am taking a second look at it since Dani Rodrik from Harvard made some interesting comments about Chris’s blog.

Watching the growth of Walmart across America – Interactive Edition
In the spirit of Toby’s Walmart growth video, using data from Freebase, I mapped the spread of Walmart using Modest Maps. It starts slow and then spreads like wildfire.

http://projects.flowingdata.com/walmart/

Walmart, growth visualization

Peter Raven lecture

Heard Peter Raven lecture just last Friday, and it was excellent. Can’t find too much of his stuff online though, but here’s one link.

He was asked about ethanol by e_f to which he simply said “It is a terrible idea.” Finally, someone in Saint Louis, heart of the corn belt, saying the truth about ethanol.

But I was able to get the question in, and he answered at some length, referring to the food riots that are presently occurring all over the world.

Why don’t we have people like Peter Raven in positions where they can influence public policy more? It might have something to do with: the deliberately confused picture painted by the media, don’tcha think? A prime example can be found right over at Reason magazine’s website.

I find it interesting that ethanol was pushed like crazy by a few big corporations, but now that it is clear that ethanol is really, really bad for the environment there is a lot of revisionism going on. And that’s what the piece from Reason magazine “The Biofuel Brew ha-ha: How the greens are making it more expensive to get blotto” is: revisionism.

Apparently, now that ethanol has been outed and found to be just a little greener than open pit coal mining, the libertarian party line is: Let’s blame the greens!

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Peter Raven lecture

Now we know the Mall owners are scared, really scared, of new competition (revised 15 November 2007)

Here’s an interesting and important legal decision that will have some very real urban design/architectural implications. It’s yet another example of small, local and very particularized developments eclipsing centralized, consolidated, and homogenized ones.

It’s also interesting from another point of view: what information we get from this lawsuit. Lawsuits are actually very efficient ways of distributing information, as each lawsuit reveals things through the adversarial process that wouldn’t always come out. In this case the information is clear: Caruso’s development model is such a threat that his competition thought the legal risk they placed themselves in was worth it. That gives an insight as to how dangerous they thought this competition is, and what means they have to counter it. They think this competition is dangerous, and they don’t have a clear way of adapting to this threat.

And we see the theme of competition between things of different scales that was discussed here. The quote from Schumpeter (I’ll get to it in just a bit) that I just love also talks about changing scales. (I hadn’t noticed that before! How could I miss that?)

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Now we know the Mall owners are scared, really scared, of new competition (revised 15 November 2007)