The American Political Economy

Was Killing Osama a Violation of International Law?

2011-05-11T02:08:00.000-04:00

Many right-wingers believe so, as do Osama's two sons. While there is no concrete evidence that this was a mission to kill, the death of an unarmed (though supposedly "resisting") bin Laden suggests otherwise. This does not mean that the SEALs are responsible for the assassination of bin Laden, but rather that the higher ups ordered his death rather than his capture.

As a country that is supposedly an protector of justice and tries so hard to enforce these international laws of fair trials, innocent until proven guilty, and the idea that a country is not permitted to go into a foreign country to assassinate a leader, we seem to have broken all of these in the bin Laden case. While it is undisputed that bin Laden is the mind (and more importantly bank account) behind the September 11th attacks, this does not mean we should set aside the laws we enforce in this case.

More importantly, simply killing bin Laden does nothing to shed light on what he truly did, and while it may be revenge for some of the friends and relatives of victims, holding a trial where the crimes of Osama were openly stated and proven would perhaps bring more closure for them. I criticize the Bush administration for allowing such a hastily done trial of Saddam Hussein, charging him merely for the killing of Shiites. The affect that Hussein had on Iraqi history was far more than this one act, and a lengthened trial exposing all the horrors and crimes committed by the dictator would have shed more light on his atrocities and aided in the "healing process" of the Iraqi people.

Obama deserves credit for taking a strong stance to find the whereabouts of bin Laden. His desire to avoid any sort of extended trial (not to mention the location of a trial would be a mystery) in order to avoid any possible martyrdom of bin Laden is also acceptable. However, the positives to be gained of putting bin Laden on trial and fully exposing him for who he is far outweigh any negatives that would be brought with this. Instead we have a celebratory America, condemned by the international community, and a hypocritical America, breaking laws it seeks to enforce.

Radicalism in the US

2011-05-10T15:16:00.000-04:00

Much of my thesis research revolved around radical Islamism in the Middle East, in particular Iran. However, there is a sort of radicalism in the US as well, and these are radical Democrats. Not only are they intolerant of the ideas of anyone but themselves, but they give the party a poor name with their intolerance. Working for Obama from 2005-2007, I had some experience dealing with the idealogies of these extremists. Much more recently, however, I have been reading a message board/forum sort of site called Democratic Underground- the site advertises itself as a political discussion site, but it is far from just that. This site produces some of the most narrow-minded Democrats one could possibly think of, people unable to see faults in their own party, and unable to give credit to anyone of the opposition. Fortunately for America, these radicals are but a small minority of the large Democratic population with realistic goals and open ears. Let us hope they see the light in this day or the next.

Is the US President Merely a Figurehead?

2011-05-08T23:01:00.001-04:00

I beg that question to all my readers, and I am sure it is one that will spark up different reactions among different readers. If a President doesnt try to follow through on campaign promises there is always an excuse that he cant do it (or anything else) alone, that he has no power to exert the authority of his office if it might upset the status quo. Many Presidents make commitments to get elected and yet they never seem to follow up on these commitments. The short answer to this is that things are much easier said than done, times change, as does the solution to problems. Because of the US system of government it is much easier to speak about reforms than to actually implement them in practice.

Now another common argument from the right wing is that Obama is taking credit for the death of Osama bin Laden and that he is not deserving of this credit. These same right-wingers are the ones who believe that George Bush, yes Bush, deserves credit for the now 2+ year later capture of bin Laden. Their argument does raise a strong point, however, and carry some weight with it, that perhaps we attribute too much of the successes of the military to the President, when his actual role is not all that important. Sure, Obama is the "decider" to use Bush's terms, and the decision does ultimately come down to him, but how often is he just repeating the suggestions of his advisers, cabinet, and intelligence officers who are far more qualified in the specialty fields? While this may be true in certain cases, it has been reported that there was not total agreement in the White House on the capture/death of bin Laden, and ultimately the decision was Obama's and his alone. I think we can more or less come to a consensus that he made the correct decision. It is also important to remember that Obama has at no point tried to take credit for Osama's death; he made sure to say that it was a joint effort and that everyone involved was equally as critical in the success of the mission. So while I do believe that at many times the job of the President today may be undermined by the fact that his sources of advice are stronger than ever, the role is still crucial and because he must take all responsibility for the decisions made, it is not merely a figurehead role.

Bradford Dewitt

Bin Laden Home Tapes Expected to be Released

2011-05-07T21:27:00.000-04:00

"WASHINGTON (KABC) -- The world will get its first glimpse into how Osama bin Laden lived inside the secret compound in Abbottabad, Pakistan.

Home videos and propaganda tapes found inside the hideout are expected to be released Saturday, U.S. officials said. This new material apparently includes candid footage of the slain al Qaeda leader strolling around the compound.

These tapes are among the wealth of information seized during the raid that killed bin Laden and four others. This collection of data suggests bin Laden played a strong role in planning attacks by al Qaeda and its affiliates in Yemen and Somalia, senior security officials said.

Officials say they have already learned a great deal from bin Laden's cache of computers and data, but they would not confirm reports that it yielded clues to the whereabouts of al Qaeda deputy Ayman al-Zawahri."

http://abclocal.go.com/kabc/story?section=news/world_ne...

Is it appropriate for these tapes to be released to the public? I think the more important findings of these should be used to help analyze the lives of the organizations to help perhaps get some insight in their daily affairs and help us prevent future attacks/capture other members of the terrorist organizations. Some say that this will help put bin Laden in a more negative light to his supporters as a man very concerned with his own self-image, as the videos are said to show lots of propaganda and him watching himself on television. I think that this could be a bigger deal than it is being made out to be- we will see the implications of it soon enough.

A "less narrow" Narrow Banking

2011-05-07T14:27:00.000-04:00

Ultimately the “correct solution” to the US’s banking troubles are not going to come from a simple return to narrow banking or a switch to macro-prudential banking either. While macro-prudential banking looks in its early stages to be working in Columbia and Spain, it has no proven success in an advanced economy, and its reliance on data and data analysis is fairly dangerous. While of course new is not always “bad,” when dealing with the American economy I think it is essential to start off with a system that has been proven to work soundly, and then implement smaller reforms on this system to make the system work even better. On the other hand, simply narrow banking (completely separating commercial and investment banks) appears to be pretty restrictive on both the commercial and investment sector and would thus lower potential economic growth. The “too big to fail” proposal, while it has many positive aspects, really seems like an answer to only part of the problem.

The best solution I believe will take aspects from all three, and the banking solution I propose does this to some degree. Narrow banking- when done correctly- has worked very well in the past for the American economy: From post-WWII up through the late 90’s, the US was essentially void of any long (1+ year) recessions, outside of those due to extreme jumps in oil prices (rise in OPEC oil prices in 1973 along with Vietnam spending and also 1981 with jump in oil prices due to the Iranian Revolution). This was while following a strict narrow banking strategy as imposed by the Glass Steagle Act. As a reference, prior to the implementation of narrow banking there were over 10 recessions of 1+ year in the US in the previous 100 years (including a number that lasted over 2 years). With less enforcement of the act in the 1990s and finally the repeal of it in 1999, investment banks quickly began playing the role of commercial banks and taking on deposits, and commercial banks began selling off their deposits as investments. Quickly this led to the worst financial crisis in the US since the Great Depression. However, it is important to remember that while the financial crisis did emerge from the mixing of banking roles, extreme economic growth occurred initially. The best solution should seek to embrace this economic growth while preventing large financial crises that can stagnate it. My proposal plans to follow a “less narrow” form of narrow banking that will be less restrictive on banks, but prevent the devalue of assets from bringing down the entire financial institution.

- The first reform I think that needs to be implemented is a simple restriction on the size financial institutions are allowed to grow to relative to the whole system. When one bank gets too intertwined in the affairs of all other banks and is essentially “too large to fail,” this can be a huge problem and have market-wide implications. Restrictions on the percentage of market assets held by any one financial institution need to be implemented to prevent the dependency of an entire economy on this single institution. Banks will still be able to continue growing, just not at a significantly faster rate than the rest.

- A clear distinction must be made between investment banking and commercial banking, just as with the Glass Steagle Act. Investment banks must be in no case allowed to take on deposits. Commercial banks must be restricted from selling off their deposits as assets, outside of Prime low risk mortgages. Requiring commercial banks to hold onto all but the most risk-free mortgages will act as in the past, as an incentive for them to not let the mortgages default. In my proposed strategy, all assets would fall under 3 “tiers” according to their riskiness. Tier 1 would include low risk highly liquid assets, tier 2 less liquid and more risky assets, and tier 3 the highest risk and least liquid assets. The basics of each tier are outlined in the table below:

Tier 1	MMMFs, Treasury Bills, Certificates of Deposit, Gov’t Bonds, Euro debt securities
Tier 2	Corporate Bonds, Preference shares
Tier 3	Debentures, Corporate stocks, credit card debt, derivitives, AAA securities (rated by Fed)

- In this proposed model, investment banks would be allowed to invest in all 3 tiers. During times of market efficiency/stability, commercial banks would be limited to tier 1 assets. Close regulation of the financial system (as in macro-prudential banking), would be put into place by the Fed to closely monitor market-wide risk, and based on this risk commercial banks would be permitted to invest in Medium risk (tier 2) assets depending on the financial conditions- during times of recession tier 2 assets will become available for commercial investment, and during booms these assets would close off.

- Additionally, credit requirements would be raised and lowered to accommodate the systemic risk (like macro-prudential calls for), lowering requirements during recessions as incentive to firms and individuals. This would essentially become another job of the fed- assess and change credit requirements and change commercial investment abilities. However, because commercial banks and mortgage companies will have to hold onto their mortgages and other loans, they will keep only giving loans to credit-worthy borrowers, and they themselves will face the problems of creditworthiness rather than the investment banks. Because narrow banking will still be in place, however, even if the data used to analyze risk ends up being incorrect, commercial and investment banking will still be largely separated and so the financial system will remain intact. In this sense, over-reliance on the analytical methods used to measure systemic risk will cease to exist.

Marcus Sayer

Implications of Celebrations-

2011-05-06T16:31:00.002-04:00

I wasn't in Washington D.C. but I have heard from some that it was "an uproar." I know in Boston I could hear fireworks and there were certainly many who found the death of bin Laden worth celebrating. But what implications, especially on the world stage, will this celebrating have? Does it make us appear as bloodthirsty as Al Quaeda itself, celebrating the death of another man? It certainly will not depict us in a positive light to Islamic states that may or may not have their minds made up how they feel about bin Laden's death to begin with. Citizens of Jordan, Gaza, and Syria report much confusion after the 9/11 attacks on how to feel: was this a great thing or a terrible horror?

Seeing Americans celebrate Osama's death has been seen by many as a disgrace and an insult to Islam. With Facebook these days connecting communities internationally, the views of the "every-day American" can be seen visibly to other citizens from the Middle East to Japan. Students setting inappropriately celebratory Facebook statuses (and often crude and disgusting ones) both shock and outrage these non-Americans. Did Obama wish to make this something worth celebrating or did he predict that this attitude would be perceived negatively by the international community? The former appears likely, especially with his delay of announcement until late Sunday night (unlike Bush strategically placing his announcements at prime-time). Or is this giving too much credit to Obama?

Justin Daniels

UN Seeks Facts behind bin Laden Death

2011-05-06T15:40:00.001-04:00

http://www.reuters.com/article/2011/05/06/us-binladen-un-experts-idUSTRE74545Q20110506

Pretty interesting article if you haven't had the chance to read it, and some of the views are ones I've expressed myself.

The likelihood that there were ever any plans to capture bin Laden is fairly small, and I've said before that I believe the mission to have been one of pure assassination. I believe the so called "threatening actions" of bin Laden could easily have been dealt with by wounding rather than killing the terrorist organization leader.

This poses the question as to if even bin Laden, the number one most wanted man in the world, deserved a trial. We gave a trial to Saddam Hussein and the WWII German and Japanese leaders, so why not Osama? Some would argue that the others surrendered before the time of capture while bin Laden did not, but was bin Laden ever given the chance to surrender to the US ops team?

Regardless of whether he was innocent or guilty (which I think there is not much to debate over), complying with international law is especially important when we are the main country seeking to enforce it worldwide.

Bradford Dewitt

Coming soon....

2011-05-06T02:06:00.002-04:00

A new financial system proposal.

How to Write About the Middle East: A Satire

2011-05-06T01:25:00.002-04:00

How to Write about the Middle East

Always use the word “Desert” or “Middle East” or “Sahara” or “Arabia” in your title. Subtitles may include the words “Arab,” “Oil,” “Egypt,” “War,” “Bomb” “Terrorist,” or “Sun.” On your cover make sure to depict all of the men wearing turbans, and in the case that you must also show a woman, make sure she wears a burka and only the thin slits of her eyes are revealed. Any readers’ curiosity as to what lies beneath will force him to read to the end.

Treat the Middle East as if it were a single country, and make sure to treat the people as if they were a single group, all with the same traditions, language, culture, and religion. There are only two settings in the Middle East: overcrowded cities and vast deserts. When describing the cities focus on the multitude of people, poorly clothed and even more poorly fed, and the large number of beggars lining the street. The noise is incoherent. And everything seems to be chaotic. Venders sell everything from silk clothing to live animals on street corners. Children play barefooted in the roads, which are unpaved. There is a mosque on every other street corner, and the other buildings pale in comparison to these beautifully built structures. Other buildings are simply impermanent tents set up in the morning and taken down at night. In the desert there is nothing but sand and more sand. Pyramids fill the entire skyline and besides an occasional well, there is no water to be found. Days of traveling might lead your character to stumble upon a local tribesman who knows the region and can give advice, or you might not be so lucky and he may stumble upon a thief who threatens his life and ultimately leaves him with nothing but the clothes on his back. The blazing sun continually beats down upon your characters until they feel like giving up all hope and dying.

Describe all the male characters as being heavily bearded and wearing constant frowns upon their faces. Include the way they shout angrily at each other and use strange unfamiliar words such as “Salam” and “jihad.” Your characters must travel by one of two means: your city characters must ride bikes or pull medieval cart like wagons, and your desert characters must ride atop camels and carry whips, running their camels into utter exhaustion. The desert characters carry 1950’s style rifles and have large herds of camels between just a few of them. In the city you must describe a specific character who tames a cobra to the sound of a charming tune, awing the spectators. Women do not exist in your desert setting, and in the cities they are only present to serve their male masters mainly through sexual gratification. None of these women have prominent roles and so it is important not to include much detail.

There must be an overarching sense of both anti-Semitic and anti-American views across the region. This “Jewish problem” is constantly brought up and any white characters are spit on by their Arab counterparts. It spans from the young to the elderly, and any Jewish sympathizers are equally as loathed. The true ruler of the land is Islam, and the men must be described as praying at all times during the day, carrying a Qu’ran with them as well as other religious texts and symbols. This is a religion of terror, and the same men who hold fast to their Islamic views meet in private to discuss future terrorist attacks. These attacks are very prevalent, and as a foreigner one’s life is always at stake. Leading the way is a powerful dictator who sits upon a throne of oil, using religion as a scare tactic to force his people to obey his strict commands.

Conclude your piece by mentioning how the terrors of the Middle East are routinely forgotten amongst the issues that are closer to our doorstep as Americans. But the threat that the Middle East poses to the world deserves much more attention. As the sun sets on this land filled with questions, a new day of disaster lies ahead.

Bradford Dewitt

Policy Advice to Obama (in an author comparison): Fareed Zakaria vs. Michael Mandalbaum

2011-05-06T01:18:00.001-04:00

Dear Mr. President:

As your foreign policy advisor it is my responsibility to provide you with my thoughts and opinions on current matters of critical importance. Your other advisors on foreign policy, Michael Mandalbaum and Fareed Zakaria, both have their own personal opinions on what the future of the United States holds and on what you must do to ensure and secure both peace and prosperity for the country in the coming years. Mandelbaum presents his perspective in his book The Frugal Superpower, and Zakaria lays out his own ideas in The Post-American World. Both offer strong, logical arguments including some profound insights that I am in agreement with and believe you should embrace. However, I feel that both their views have some critical flaws and weaknesses that need to be addressed, as they could have serious repercussions in terms of risk to your own political future as well as to the future of our country.

Mandelbaum’s argument hinges on the idea, as his title suggest, that the United States has become a “frugal superpower because it is no longer able to sustain the massive costs and spending it incurred in past decades to defend its position as a world power. He sees of the American economy today in its most serious crisis since the Great Depression. He paints an extremely dismal picture of the enormous budget deficits and resulting debt that have been created over the past decade and argues that the situation will only worsen as Americans age and entitlement spending increases. In particular, Mandelbaum worries, as I believe you should, that with the start of the retirement of the Baby-Boomer generation and their subsequent qualification for Social Security and Medicare in 2011, our economic problems will rise sharply. Although politically risky, the solution Mandelbaum proposes that would yield the best results would be to raise the retirement age by a few years. Although this move would undoubtedly generate a lot of disapproval, especially in the elderly community, it would ultimately save the government billions of dollars in spending that it does not have at its disposal.

The real flaw I see in Mandelbaum’s line of reasoning, however, is his approach to dealing with the Middle East. He proposes a sharp increase in the current gas tax, which he believes will reduce American oil consumption, thereby greatly hurting the economies of corrupt governments of oil-rich region and eventually leading to the spread of democracy throughout the region. I see a number of holes in this argument. As a country that generates large amounts of its own oil and imports only around 25% from the Middle East, our reduction in consumption will have much less revenue impact on the governments of the Middle East oil exporters than Mandelbaum anticipates. In addition, in direct response to our under-consumption of oil, power-hungry countries such as China would jump on the opportunity to purchase higher quantities, raising their ability to produce and raising the worries of the American public about our country’s global competitiveness. I also strongly question the notion that a blow to the economies of corrupt regimes will lead inevitably to an overthrow of the current rulers and an introduction of democratic institutions. In fact, barring intervention, the replacement of these leaders with others equally corrupt seems much more likely. And finally, there is the practical feasibility of securing the gas tax that Mandelbaum proposes. He calls for a gas tax increase of more than 300%, a figure that is jaw-dropping consider the fierce resistance to much more modest proposals for raising the tax by only a few pennies over the current $0.18 level. In my opinion, the near-term likelihood of passing a gas tax at the level Mandelbaum proposes is slim to none – and just proposing such an increase could cost you enormously in terms of political capital. That said, as a vehicle for increasing government revenue, I do believe you should advocate for a smaller gas tax increase -- but without holding out any realistic hope that such an increase will drive real change in the Middle East. What such a tax increase would do is help us to move away from our reliance on oil, reducing the number of SUV’s and other oil-hungry vehicles on the road and moving us towards more environmentally-friendly modes of transportation.

Although Mandalbaum does present some insightful arguments (particular in his recognition of the limitations of American power in a world of growing scarcity), I believe it would be wise for you to pay more attention to Fareed Zakaria, who presents in The Post-American World a cogent set of ideas and perspectives much closer to my own on what the future of America holds. He envisions a world in which our power diminishes in relative terms with the rise of new world powers such as China, India, and Brazil. He then focuses on the new role in the world we must take on to accompany the rise of these powers and the end of a unipolar age. It is difficult to argue with Zakaria’s analysis of our current situation and of the many challenges we must overcome to maintain our lead or at least keep up with other growing nations. I would draw your attention in particular to Zakaria’s perspective on the issue of immigration, which I strongly support. One of our country’s greatest strengths historically has been the consistent desire of foreigners to emigrate and become Americans. Looking to the future, while the populations in Russia, China, the UK, India, and other powerful nations mature and age, the United States can enjoy an expanding population in which the influx of immigrants serves as a fuel for continued innovation and growth. So while developing and maintaining an appropriate immigration policy does present many challenges, I believe that the approach Zakaria proposes, recognizing the advantages that spring from immigration and therefore embracing it, is one that will serve the country well in the long run.

The major issue I have with Zakaria’s overall argument is that he (like Mandelbaum) sometimes seems overly confident about the future of the United States and the ease at which current problems can be sorted out. For example, while his assumption of the inevitability of China becoming a world power is doubtless realistic, I find him unduly optimistic about the ability of Americans to accept this fact and the resulting new role he envision for the U.S. as a “power amongst many powers.” He fails to adequately address the problems that will be caused by Chinese interest in geographic expansion, increased control in the Southeast seas, and a number of other issues which will surely cause outrage within the U.S. Furthermore, I fear Zakaria may underestimate the challenge for the U.S. in simply keeping up with China in the years ahead. As he points out, China is producing far more scientists and engineers than the U.S. – the result not just of its larger population base but also of America’s poor long-term education decisions (e.g., we are graduating more sports medicine than engineering majors). And while the quality of our educational system may mean that the abilities of an individual American engineer may exceed than that of a Chinese engineer, China’s advantages in sheer numbers far outweigh this factor. So it is becoming increasingly important that we remember what has brought us success in the past and what will help secure our strength in the future.

Like Mandelbaum, Zakaria also seems to me to underemphasize the importance of the Middle East, seeing the issues there as ones that should take a backseat to many others. I think he vastly underestimates the dangers emerging from the region and also the ability of the U.S. to walk away from it completely without causing more problems than already exist. In my option, the instability in the entire Middle East region is a top priority that must be dealt with and must remain at the forefront of your mind.

Zakaria’s optimism especially dominates his analysis of India, which he sees as a “slowly moving arrow in the right direction.” It is unclear to me if this assessment is grounded in reality or rather in a personal desire to see his native country flourish. While India does seem to be advancing economically and has the population necessary to be a world power, as of now there are few signs that the country is able to look current internal problems and its fractious relations with Pakistan. For the moment at least, India seems to exhibit little desire or even interest in involving itself affairs on the international stage.

My final argument with Zakaria is over his sanguinity regarding the economic stability of the U.S. and the ease to which policies can be implemented to solve a majority of the front-page dilemmas the country faces. Because his book was published shortly before the current economic crisis hit its peak, Zakaria can be excused for a somewhat over-trustful critique of the economy. However, his statement that “a set of sensible reforms could be enacted tomorrow to trim wasteful spending and subsidies, increase savings, expand training in science and technology, secure pensions, create a workable immigration process, and achieve significant efficiencies in the use of energy” (211) seems remarkably naïve in the current political environment. He seems to be arguing here not only against a system of government which has operated fairly smoothly for over two centuries, and suggesting – incorrectly, in my view -- that under different leadership these problems could be easily cured. I believe the reality of the world is much more complex than this.

Both my fellow advisors present very worthwhile points in their respective books, and many of these you should consider greatly in your decision making process in the upcoming months. Overall I would warn you to be mindful of the sometimes over-simplified strategies that Mandelbaum proposes, and the over-optimism in Zakaria’s arguments, and make sure you realize that it isn’t going to be easy to move into this new multipolar era. It will be impossible to avoid conflict, and the goal should thus be to minimize the amount of conflict necessary. You will not be able to please all who you represent, but most will stand by you as you lead the country in the right direction.

Nicholas Jared

The Economics Behind Cheating (In School)

2011-05-06T01:15:00.002-04:00

One of the biggest problems faced today in classrooms from elementary schools through colleges is cheating. Whether on a minor in-class assignment or a final exam, cheating is prevalent in almost all different scenarios. As a result of cheating, many professors have implemented test-taking policies designed to help reduce such activity: forcing students to sit far apart, creating multiple test versions test to complicate copying from others, or just monitoring students closely as they complete their tests, making note of anything out of the ordinary or suspicious. More interesting than strategies to prevent cheating or catch students who cheat, however, are attempts to explain the reasoning behind cheating -- why some students choose to cheat and others don’t. Overall, the reasoning behind cheating comes down to three major things: cost and benefits, impact on a student’s self-image, and negative externalities that cheating causes for the entire class.

The most basic factor in a students decision whether or not to cheat comes down to the simple analysis of the costs and the benefits of cheating. If a student comes well-prepared to an exam, believes that he can score a high mark on the exam, and is not worried about the results, then he will have very little incentive to cheat. Even if he can score a few more points by his looking at his notes or copying the work of another student who may know the material better, this small benefit is outweighed by if he is caught and receives a zero on the exam. On the other hand, if a student comes ill-prepared to an exam, does not know the material very well, and believes that cheating can improve his score from a failing grade to an A, he may then feel that this benefit is worth the risk.

A second major driver of the decision whether or not to cheat – and one which in effect counteracts the cost-benefit approach outlined above -- is the impact cheating will have on one’s self-image. If the cost-benefit approach was the ultimate answer on cheating, then we would anticipate that as potential gains from cheating increase and the probability of getting caught decreases, students would likely cheat at an even higher rate. However, this has been demonstrated to be not the case for most students, specifically in a study conducted by behavioral economist Dan Ariely of University of Chicago who tested the amount of cheating under differing situations. Ariely found that because people want to feel good about themselves, they will tend only to cheat in small amounts. Even if incentives rise and risks fall, people will not increase their level of cheating. Ariely refers to this willingness to cheat a little and still feel good about yourself as an individual’s “personal fudge factor.” One psychology study showed that students are less likely to cheat when they are viewing themselves in a mirror, and this reinforces the idea that because they want to feel good about themselves and not guilty, despite the circumstances they will only cheat in small amounts. Williams College, a small liberal arts college in Massachusetts has implemented a policy of having students sign the Honor Code before taking any exam, large or small (this has been implemented now at several other schools). The professors then leave the room and let the students continue on with the exam without them present. While this creates a lower-risk cheating environment, having the students sign the code, thus reminding them of the immorality of cheating, actually should work in the opposite way and help to reduce cheating. This is because of the idea that people want to feel good about themselves, and thus another cost of the cheating becomes the negative image of yourself that will be created if you do decide to cheat.

The final factor that plays into the decision to cheat is the negative externalities that are created through a student’s cheating. At classes at Williams and in other college level courses, the class average on an exam determines the curve for the class on that exam. However, if one or multiple people cheat, then it hurts the entire class as a whole, by raising this class average. A student through cheating can raise his or her grade from as low as a D or F up to an A, and this could act to raise the class average by a fairly large amount. The more students that decide to cheat, more the average will raise. And as a result of the raised class average, the curve for the entire class will be lowered. If a student beforehand recognizes this negative externality that their behavior will cause, then they will be less inclined to cheat, as cheating will hurt all of their classmates and once again make them feel guilty. In conclusion, cheating is a large problem faced in classes and schools around the world. The decision of students to cheat really seems to boil down to three things, the costs and benefits of cheating, the amount that the cheating will affect their own view of themselves, and the negative externalities that cheating will impose on their fellow students. Hopefully through weighing all these things students will come to realize that there is much more to lose than to gain and it is not worth it to cheat

Nicholas Jared

References

Ariely, Dan. “We’re All Predictably Irrational.” 2010. http://danariely.com/

Schacter, Gilber, Wegner. Psychology. New York: Worth Publishers, 2009.

Sager, Ryan “The Economics of Cheating.” March 19, 2010. http://www.smartmoney.com/spending/rip-offs/the-economics-of-cheating/

China vs. India: A Policy Memo

2011-05-06T01:12:00.001-04:00

Today we see many developing countries advancing their economies through reform policy designed to stimulate economic growth. There are two different viewpoints as to how government policy can best promote growth in foreign countries. Easterly and Shleifer hold that free market reforms are key and should be emphasized, while government should work to eliminate any policies that get in the way of the free market. On the other hand, Hausmann sees government having a larger role in these policy reforms. He argues that while free market reforms are important, they do not tell the entire story, and that unorthodox but creative government solutions can often prove even more important than free market forces.

Prior to the industrial revolution, China led the world towards advancement in almost every industry. However, with the transition from largely manual to more mechanized economies, Western Europe and the United States soon surpassed China. But in the late 1970’s the fortunes of the Chinese seemed to turn once again -- and China’s progress has not slowed since that time. China today boasts one of the highest GDPs in the world, second only to that of the United States (and likely to overtake the US’s within the next decade). China seems to have followed the Hausmann approach of using government policy to stimulate economic growth. Free market reforms are of some importance, as Hausmann says, and we can see that China has made some of these, lifting many existing trade barriers and allowing much foreign investment that has made western economies heavily dependent on China. However, as Hausmann argues, these free market reforms are only a small piece of the picture in terms of how a country can really develop economically, and this is especially the case with China.

The real driver of China’s growth has been a series of policy reforms implemented by the government. One key reform has been the change in the agricultural sector. Up until the late 70’s, agriculture consumed over 70% of the Chinese work force. China has managed to mechanize much of its agricultural industry, making it much more efficient, such that today less than 50% of the work force is in the agricultural sector – yet with agricultural output higher than ever (and continuing to grow). And by lowering the labor input required for agriculture, China has been able to reallocate large numbers of workers to the industrial sector, boosting output by a large margin. As a result, Chinese manufacturing, which was very limited prior to 1980, today accounts for over 1/3 of the country’s total GDP.

A second critical Chinese reform policy was the market liberalization, whereby prices were liberalized at the margin. Prior to introducing this policy, companies had to sell all of their produce at government-set prices. The reform set up a “dual track” system: enterprises continued to sell their “quota” production at the government-set prices, but were allowed them to sell any surplus over their quota at market price. Eventually, the inefficiency of the government-set prices was recognized, and the “dual track” system was transformed into a “single track” market system.

In addition to the change from government-set to market price, another set of reforms was introduced around the concept of township and village enterprises “TVEs.” The majority of these TVEs were set up during the reform period [what years?] as local government-owned businesses, and by the mid-80s they employed over 30% of the labor force in certain Chinese provinces. TVEs provided local governments with great sources of revenue and avoided many of the problems and challenges faced by privately-owned enterprises at the time. In the mid-90’s, as governments found that it was too costly for them to run the TVEs themselves, another series of reforms was introduced, privatizing many of the TVEs and at the same time lifting many restrictions of private entities. However, local governments still retained a fee of total sales and so they were able to keep high revenues.

In India we see government reforms that more closely emulate the strategy proposed by Shleifer and Easterly. The main drivers of India’s (much more modest) economic growth are less creative government policies than basic free market reforms. In the 1970s-1990s the Indian government reduced the number of sectors subject to licensing laws, lowered tariffs dramatically, lowered and eventually eliminated quotas on imports, and in 1991 undertook significant deregulation of industry. India ultimately found it necessary to obtain assistance from the International Monetary Fund, demonstrating how committed the government was to economic reform. While all of these measures worked well in putting India on the right economic track, India’s GDP remains much smaller than China’s and the gains in total factor productivity are only 1 percent in India over 2.5 percent in China. And while China has made huge strides in the agricultural, industrial, and service sectors, India’s primary growth has been much more concentrated in the service industry. Thus, while both approaches of economic reform appear to have been quite successful in moving the two countries beyond the poverty of 50 years ago, the strategies pursued by China have been much more effective and have produced substantially greater economic benefits for its population.

Nicholas Jared

Financial Issues Facing College Students

2011-05-06T00:50:00.001-04:00

Tuition- $40,000
Room &Board- $11,000
Books&Supplies-$800
Personal Expenses-$1,200
Total fees~ $53,000

For a 4 year private college with a top tier reputation students will end up paying between 50 and 55k per academic year. This can be a burden on parents and the students themselves who often find themselves with huge amounts of debt upon graduation; simply because they have chosen to pursue the best possible education. Do they really need the burden of more expenses on top of this already heavy load?

Unfortunately the schools are not as understanding of the high prices as one would expect. Surveys of students at 3 New England Small Colleges (NESCAC) including both Williams and Amherst colleges report students having to bear high costs for travel arrangements to airports in Albany, Boston, and New York City. Speaking with students at Amherst College it was reported that a 1-way trip to Boston (~1.5 hours from the school) is about $33/person. Albany and New York City (3-4 hours away) cost closer to $45/person for the one way trip. Consider the fact that the students are traveling in 50+ person shuttles and that comes out to well over $1000/fare. Fuel costs even with a large vehicle like that are not reaching over $75 and surely the lowly driver is not making more than $100/trip. So what is happening to the leftover money? This is going straight into the already fat budgets of the colleges, to consumed with money to help their paying students head home for the holidays.

Marcus Sayer

Economic Inefficiencies of Habitat for Humanity

2011-05-05T23:43:00.001-04:00

I recently came across some information that really got me thinking. I was a participant in my high school's habitat for humanity club and now am college student. A number of my friends have participated throughout the years in their schools' respective Habitat clubs and have then taken week long spring break trips with 20-30 of their classmates to build a house in Guatemala, Honduras, Florida, etc. Commonly they will fly out each student ~$400/student round trip. Instead of having a group of inexperienced college kids attempting to build a house (many of which have been falling apart only a few years after their completion), why do these clubs not use this money to hire MANY more local workers in one of these locations. They would create needed jobs, hire many more people- the estimated cost of sending a student on one of these trips for a week is ~$600-700 total. Many of the local residents would be willing to do this week's work for $200 or less allowing the hiring of three times as many individuals. The more skilled labor that I mentioned beforehand would allow for a more well built and trustworthy house, and money would be contributed directly to the community rather than being wasted on plane tickets.

Unfortunately, for many school groups this in an unrealistic request. The trips have turned into a sort of "tropical getaway," with the motivation for the students being more so a week on a sunny beach with their than going to help build a house. Friends of mine have returned with stories of scuba diving, jet skiing, and para-sailing, activities associated with a luxury trip to the Bahamas rather than a charitable one. The heads of these clubs argue that visiting the regions will allow the students to see for themselves the terrible conditions and make them appreciate their lives. But aren't we in a time where the acridness of the conditions can be gauged through a thirty minute news segment, a fifteen second Google search, or a trip to the local food shelter? While I am stressing Habitat for Humanity, these all are clubs that stress aiding as many people as possible, yet they forgo helping as many as sixty people to help only three and themselves. Let's stop trying to convince ourselves that we are humanitarians unless we are really willing to go at the issues head on.

Marcus Sayer