Video: The Great Euro Crisis (BBC)

A good series of interviews for understanding why many Greeks (and Germans) still prefer that Greece keep the euro rather than return to its previous currency, the drachma. 

Self-confessed Eurosceptic Michael Portillo visits debt-stricken Greece. He believes that the euro crisis must have shaken the Greeks' faith in Europe's single currency and wonders if there'll be a desire to revert to the free-floating drachma. In Athens he meets everyone from a destitute young family to the former finance minister and the outgoing Prime Minister, and is surprised by some of their answers. Meanwhile in Germany, Europe's economic powerhouse, Michael encounters the taxpayers who are paying most towards Greece's mammoth financial bailout while having to watch angry Athenians burning the German flag.

Young People CAN and ARE Making a Difference in Europe

Getting more young people (and women) into positions of political power is a good thing.

Alexis Tsipras, leader of Syriza

Whether you agree or disagree with the politics of 37-year old Alexis Tsipras, the leader of a leftist-Greek coalition which surprised in the weekend election, he has demonstrated that not every member of the next generation is politically impotent.

While this blog probably would not be characterized as far left-wing, we do celebrate seeing someone under-40 years of age achieving political success.

Bravo, Alexis!

The PolyCapitalist Endorses Laurence Kotlikoff for U.S. President

Professor Kotlikoff just announced that he's running for U.S. President! More on the announcement and Larry's plan to get the U.S. back on track here.

And here are my previous posts about some of Professor Kotlikoff's great ideas.

Video: Jeffrey Sachs Full LSE Talk on The Price of Civilization

Image of the Day

(click to enlarge)

In case you missed the video.

More on the story and fallout here.

Educational Site: If you are concerned about political reform, you might be interested in taking courses as a political science major.

Video: Niall Ferguson on China's 'Achilles Heel'

Ciao G-Pap

Greek Prime Minister George Papandreou is departing following the quick withdrawal of his referendum gambit, as it came to be called.

The word 'gambit' turns out to be quite a prescient or fortuitous choice. Of Italian origin, the literal translation of gambetto is 'tripping up'.

Another day in the Eurozone crisis and another politician bites the dust. With G-Pap gone it's your move Herr Berlusconi.

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gambit |ˈgambit|

noun

(in chess) an opening in which a player makes a sacrifice, typically of a pawn, for the sake of some compensating advantage.

• a device, action, or opening remark, typically one entailing a degree of risk, that is calculated to gain an advantage : his resignation was a tactical gambit.

ORIGIN mid 17th cent.: originally gambett, from Italian gambetto, literally ‘tripping up,’ from gamba ‘leg.’

Recommended links

1. Why is Greece turning down the “bailout” (Tyler Cowen)

2. Circular commitments lead to a Ponzi economy (Letter to the FT). Here's the key quote:

If governments stand behind banks and banks stand behind governments and the central bank lends freely to both and also underwrites financial markets, then financial asset prices become completely detached from economic reality. In this “system”, the central bank implementing more quantitative easing is no different, in economic terms, from Bernie Madoff marking up his client accounts every month.

3. The Bailout That Busted China's Banks (WSJ)

4. Mr. Hoenig Goes to Washington (Simon Johnson)

5. Bond Dealers See Fed Holding Rate Near 0% at Least Through First Half of 2013 (WSJ)

6. Papandreou Is Right to Let the Greeks Decide (Spiegel)

7. Live European debt crisis coverage (BBC) and (Telegraph)

Video: Nassim Taleb On Occupy Wall Street

Video after the jump:

Ever Heard of Somaliland, the Peaceful and Democratic Neighbor of Somalia?

Somaliland's flag

Contrary to the piracy and kidnappings which the media tends to focus on positive things are happening in parts of the Horn of Africa.

Somaliland is one such example. President Ahmed Mohamoud Silyano describes his people's quest for international recognition here.

Here's the BBC's profile of Somaliland.

Though not internationally recognised, Somaliland has a working political system, government institutions, a police force and its own currency. The territory has lobbied hard to win support for its claim to be a sovereign state. 

The former British protectorate has also escaped much of the chaos and violence that plague Somalia, although attacks on Western aid workers in 2003 raised fears that Islamic militants in the territory were targeting foreigners. 

Although there is a thriving private business sector, poverty and unemployment are widespread. The economy is highly dependent on money sent home by members of the diaspora. Duties from Berbera, a port used by landlocked Ethiopia, and livestock exports are important sources of revenue.

Information about traveling in Somaliland, including guidance on safety, can be read about here.

Video: SNL Parody of Republican Presidential Debates

Greek Referendum on Leaving the Euro

Update: a rumor no longer. Latest polling shows 60% of Greeks oppose last week's bailout deal, while 70% want to keep the euro. The vote will supposedly take place sometime early next year. I stand by my earlier prediction that this vote will never take place for the reasons described below. The prospect of a Greek vote on not just the bailout but Eurozone membership, hanging over the financial system like a Sword of Damocles, cannot possibly be tolerated for the next three months.

The latest rumor:

As pressure from Greece’s foreign creditors and austerity-weary citizens mounts on the government, Prime Minister George Papandreou is considering calling for a referendum on whether Greece should continue to tackle its debt crisis within the eurozone or by exiting the single currency. 

According to sources, Papandreou hopes that the outcome of such a vote would constitute a fresh mandate for his Socialist government to continue with an austerity drive backed by Greece’s international lenders -- the European Commission, the European Central Bank and the International Monetary Fund.

A bill submitted in Parliament, paving the way for a referendum to be carried out, is to be discussed in coming days.

Here's the source.

Will Greeks be allowed to vote on whether or not they want to remain in the Eurozone? Extremely unlikely, IMO.

The Eurozone is like the Eagles' Hotel California: countries which have been invited can check in any time they like, but they can never leave. A formal legal process for leaving the Eurozone was intentionally left out of Maastricht.

The situation on the ground in Greece is already incendiary enough as it is. Putting the euro to a Greek vote, while democratic, would trigger far too much chaos. And if the majority voted in favor of leaving the euro and returning to the drachma there would be an immediate, full run on Greek banks (if it hadn't already been completed in anticipation of the voting result).

If Greece decides to leave the Euro, which looks increasingly likely, it won't be done through a popular vote.

Why oh why on Earth is anyone still keeping their euros in a Greek bank? Or to put it another way, why aren't the Greeks behaving more like the Irish?

Pakistan 101: Bhutto Movie Review and Trailer

Pakistan is complex, messy, and an absolutely crucial place for the world to better understand.

Pakistan is described as a military that happens to have have a country attached to it. The Economist recently argued that the Pakistani-Indian border is the world's most dangerous (although I'd argue back that the North Korean-South Korean border is perhaps equally if not more dangerous). The country has nuclear weapons and has trafficked nuclear technology to North Korea, Iran and Libya. It is also perhaps ground zero in the War on Terror.

In the U.S., many questions have arisen since Osama bin Laden was killed in Pakistan about just how reliable a friend is Pakistan? Since 2002 the U.S. has sent nearly $20 billion in military and other aid to the country, with another $3 billion slated for 2011. How is that aid being used? Is this policy helpful or harmful to not only the U.S.'s interests, but Pakistan's?

The film Bhutto, which premiered at the Sundance Film Festival last year, is well made, engaging, informative, and highly recommended. While it perhaps can justifiably be accused of painting a positively-biased picture of Benazir Bhutto, it does not shy away from interviewing her critics and pointing out at least some of the accusations of corruption made against Bhutto and her husband, Asif Ali Zardari, the current President of Pakistan.

This film is a recommended piece of edutainment for anyone interested in learning more about Pakistan and who likes learning through movies. It provides a helpful introduction to the history of Pakistan and the significant role the Bhutto clan have played.

Even more highly recommended is the book Ghost Wars by Steve Coll (who is interviewed in the film), which you can find on the right side of this blog in the Good Books and Films section.

In Greece, Locals Rule

Harvard Professor Dani Rodrik clearly spells out the bottom line on Greece:

History suggests...when the demands of financial markets and foreign creditors clash with those of domestic workers, pensioners, and the middle class, it is usually the locals who have the last say.

Rodrik's full post here, and video you won't see on most main stream media below.

Chimerica or Chindia: Who Will Dominate the 21st Century?

A good read from Evans-Pritchard which covers several of the main issues which will determine which nation(s) will prosper the most in the 21st century.

Some of the key pieces of data highlighted in the article:

• Demographic trends (e.g., China's 1.2 males/female ratio suggest social instability)

• China’s workforce peaks in absolute terms in four years

• Birth rates: Beijing and Shanghai are 1.0, Korea is 1.1, Singapore 1.2, Germany 1.3, Poland 1.3, Italy 1.4, Russia 1.4 with the U.S. coming in around the population replenishment rate of 2.1

• Environmental catastrophe: China's growth rate of 10% is outstripped by 13.5% in GDP equivalent eco-damage)

Preview: Niall Ferguson's Civilization - The West and the Rest

Niall Ferguson's new book, titled Civilization: The West and the Rest, will be released shortly on March 3. An accompanying six-part Channel 4 television series premieres on March 6 in the U.K.

Here's a preview:

If in the year 1411 you had been able to circumnavigate the globe, you would have been most impressed by the dazzling civilizations of the Orient. The Forbidden City was under construction in Ming Beijing; in the Near East, the Ottomans were closing in on Constantinople. 

By contrast, England would have struck you as a miserable backwater ravaged by plague, bad sanitation and incessant war. The other quarrelsome kingdoms of Western Europe – Aragon, Castile, France, Portugal and Scotland – would have seemed little better. As for fifteenth-century North America, it was an anarchic wilderness compared with the realms of the Aztecs and Incas. The idea that the West would come to dominate the Rest for most of the next half millennium would have struck you as wildly fanciful. And yet it happened. What was it about the civilization of Western Europe that allowed it to trump the outwardly superior empires of the Orient? 

The answer, Niall Ferguson argues, was that the West developed six “killer applications” that the Rest lacked: competition, science, democracy, medicine, consumerism and the work ethic. The key question today is whether or not the West has lost its monopoly on these six things. If so, Ferguson warns, we may be living through the end of Western ascendancy. Civilization takes readers on their own extraordinary journey around the world – from the Grand Canal at Nanjing to the Topkapi Palace in Istanbul; from Machu Picchu in the Andes to Shark Island, Namibia; from the proud towers of Prague to the secret churches of Wenzhou. It is the story of sailboats, missiles, land deeds, vaccines, blue jeans and Chinese Bibles. It is the defining narrative of modern world history.

May 1st Update: Just finished watching the full six-part television series, which you can view for a few more days here. It was excellent and I highly recommended it.

I did spot one perhaps small nit: in episode six on 'Work', Ferguson describes American inventor Thomas Edison as the "alternating current (AC) king" of electricity. Whether or not this was another nickname for the "The Wizard of Menlo Park", it was fellow inventor Nikola Tesla (along with perhaps George Westinghouse) who can lay proper claim to being the true AC King. Edison was a fierce opponent of AC in favor of his own alternative (and inferior) direct current (DC) system.

To associate Edison with AC as Ferguson does is at best historically incomplete, or worse perhaps misleading.