As he is apt to do, Matthew Yglesias sums it up perfectly:

And what’s been happening is that whatever Hamas’ ambitions may or may not have been, they were scattering short-range inaccurate rocket fire on Israel that was causing little damage. Israel struck back with actions that have killed hundreds of Palestinians and pushed over a million more closer to the brink of starvation. And in general this is an important aspect of the conflict — irrespective of intentions, over the years you have many more dead Palestinian civilians than Israeli civilians.

But another piece of the puzzle is that though American Jewish liberals tend to take a lot of comfort in the idea of Israel’s good intentions and good faith throughout this whole process, there’s a reason approximately no Arabs anywhere in the world see it that way. All throughout the “peace process” years — through the good ones and through the bad ones — Israel continued expanding both the geographical footprint of its settlements and the population living upon them. For most of this time, Israel has often appeared unwilling to enforce domestic Israeli law on the settler population, to say nothing of abiding by international law or agreements made. And while Israel has stated a desire to leave the Gaza Palestinians alone in their tiny, overcrowded, economically unviable enclave, the “disengagement” from Gaza has never entailed letting Palestinians control their borders or exercise meaningful sovereignty over the area. The proposal has basically been that if Palestinians cease violence against Israel, then the Gaza Strip will be treated like an Indian reservation. Israel’s policy objectives in the West Bank appear to be first seizing the choice bits of it, and then withdrawing behind a wall with the residual West Bank treating like post-”disengagement” Gaza.

Via The Marmot’s Hole, this United States Map of the World gives a face to the astonishing extent of global inequality. With each state matched up with the country that has an equivalent GDP, it also puts a new perspective on familiar issues. For instance, immigration from Latin America, legal or otherwise, is not going away any time soon when Illinois has an economy the same size as all of Mexico. And think about the size of Russia’s decline since the collapse of the USSR. Its economy is the size of New Jersey’s. Iran, meanwhile, matched Alabama.

GDP is by no means the only measure of a country’s or a people’s well-being. France, for instance, would surely have a much larger economy (now equivalent to California), if they didn’t mandate so much vacation time for their workers. But the French are happy with the trade.

Nevertheless, the map is illuminating. Produced by the Globe and Mail newspaper in Toronto, they’ve also helpfully subtitled it, “Why the ‘bastards’ matter.”

Tags: economy, globalization, immigration

One point that has always puzzled me about the rise of China, and the flight of manufacturing jobs overseas in general, is this: what do Americans actually do anymore? Certainly the United States has suffered in certain areas because of outsourcing, but taken as a whole, it is still the largest economy in the world by a large margin. But we don’t make the products, where does the money come from?

Fortunately, we have James Fallows to explain everything in a fascinating article about China. It’s all about the “smiley curve”:

The curve is named for the U-shaped arc of the 1970s-era smiley-face icon, and it runs from the beginning to the end of a product’s creation and sale. At the beginning is the company’s brand: HP, Siemens, Dell, Nokia, Apple. Next comes the idea for the product: an iPod, a new computer, a camera phone. After that is high-level industrial design—the conceiving of how the product will look and work. Then the detailed engineering design for how it will be made. Then the necessary components. Then the actual manufacture and assembly. Then the shipping and distribution. Then retail sales. And, finally, service contracts and sales of parts and accessories.

The significance is that China’s activity is in the middle stages—manufacturing, plus some component supply and engineering design—but America’s is at the two ends, and those are where the money is. The smiley curve, which shows the profitability or value added at each stage, starts high for branding and product concept, swoops down for manufacturing, and rises again in the retail and servicing stages. The simple way to put this—that the real money is in brand name, plus retail—may sound obvious, but its implications are illuminating.

That makes sense, though to me it was counterintuitive. Transitioning from an industrial economy does involve real loss, but the loss is likely amplified by a psychological bias towards making things and against the more abstract tasks of designing, branding, and retailing.

Much of consumer society is based on fooling ourselves that a brand’s appeal is based on the product itself, and not our preconceived ideas about it as taught by advertising. Instead, as Fallows points out, whichever laptop brand you choose is probably made of the same parts put together in the same factory in China:

I saw a set of high-end Ethernet connecting cables. The cables are sold, with identical specifications but in three different kinds of packaging, in three forms in the United States: as a specialty product, as a house brand in a nationwide office-supply store, and with no brand over eBay. The retail prices are $29.95 for the specialty brand, $19.95 in the chain store, and $15.95 on eBay. The Shenzhen-area company that makes them gets $2 apiece.

For an even stranger example, we have the Life of a Chinese Gold Farmer by Julian Dibbell in the New York Times. All the elements of Chinese factory life described in Fallows story are there, but this time the workers (an estimated 100,000 of them!) are playing the online video game World of Warcraft, killing monsters in 12 hour shifts, 7 days a week, to collect digital gold:

At the end of each shift, Li reports the night’s haul to his supervisor, and at the end of the week, he, like his nine co-workers, will be paid in full. For every 100 gold coins he gathers, Li makes 10 yuan, or about $1.25, earning an effective wage of 30 cents an hour, more or less. The boss, in turn, receives $3 or more when he sells those same coins to an online retailer, who will sell them to the final customer (an American or European player) for as much as $20.

Read the whole article for some amazing anecdotes, including the story of a 40-person squad of elite Chinese players working together to escort one paying American through the most difficult dungeons. And you might be surprised at what some of the workers do in their spare time.

Photo by Flickr user Arthaey obtained under a Creative Commons license.

Tags: China, globalization

The human tragedy of Iraq continues every day. I see the headlines telling of bombs exploded, soldiers and civilians dead, but I only give them passing notice. I know that every story, while horrific for the loved ones of those killed, will be the same to me, so far removed from the events as I am.

But sometimes a story or an image breaks through. Above is the before and after picture of the al-Askari mosque, destroyed today in an attack that the American military is blaming on Al Qaeda. I won’t turn this into a political comment about what should be done in Iraq. But sometimes we need to be reminded: war doesn’t destroy only lives, though that is bad enough. It devours our culture, our history, our beauty. It tears apart friendships, breaks trust between neighbors, pervades with fear and anger every moment, big and small, that makes up our lives.

It may seem petty compared to the 3,000+ coalition soldiers and the tens of thousands of Iraqis who have already died in this war. But the al-Askari mosque was a symbol, of a religion, of a people, of a city. Now it represents only destruction and hate.

Tags: Middle East

Via Shakesville:

Farmers in this poor rural area 400 miles northwest of Shanghai had complained to local government officials since 2004 that Mao’s factory was spewing noxious fumes that made their eyes tear up and the poplar trees nearby shed their leaves prematurely. Yet no one stopped Mao’s company from churning out bags of food powders and belching smoke — until one day last month when, in the middle of the night, bulldozers tore down the facility.

It wasn’t authorities that finally acted: Mao himself razed the brick factory — days before the investigators from the U.S. Food and Drug Administration arrived in China on a mission to track down the source of the tainted pet food ingredients.

With the caveat that it is also extremely terrible, I have to say that the image of the villain bulldozing his factory in the middle of the night is darkly hilarious. It has been said that American reality outpaces fiction, but I would be willing to bet that this is a global phenomenon.

Tags: China

Ezra Klein on France:

The French like not working incessantly. They are consciously sacrificing a bit of economic growth in order to devote more time to leisure. It’s a perfectly legitimate choice for a society to make. But it’s never represented that way in domestic punditry, as we exclusively evaluate policy decisions based on their effects on measurable economic indicators. [...] in contemporary American discourse, it’s almost impossible to justify any policy that won’t plausibly increase economic growth.

Clive Crook on the American Dream:

The American model has been regarded as proposing a kind of bargain. This is not Europe: Here, idleness and incompetence are sternly punished—but merit gets rewarded. Much more than elsewhere, your class background will neither prop you up nor hold you back. If you deserve to succeed, you will.

It is an inspiring, energizing offer—and still a profoundly influential one. It colors the national debate about taxes, health care, and other aspects of economic policy. But it is false advertising.

[...]America stands lower in the ranking of income mobility than most of the countries whose data allow the comparison, scoring worse than Canada, all of the Scandinavian countries, and possibly even Germany and Britain. [...] According to one much-cited study, for instance, more than 40 percent of American boys born into the poorest fifth of the population stay there; the figure for Britain is 30 percent, for Denmark just 25 percent.

And finally, Andrew Leonard on preschool:

University of Chicago economist James Heckman (a Nobel Prize winner in 2000) and University of Michigan doctoral candidate Dimitriy Masterov marshal an impressive argument in support of early intervention preschool programs for children from disadvantaged backgrounds as the best tool for ensuring later success in life. The evidence compiled is conclusive. Children from such backgrounds who gain access to such programs are more likely to graduate high school, less likely to end up in jail, and will score higher on aptitude tests. And the longer society waits to try to fix the problem — by boosting funding for secondary school education, or by providing tuition help for college, for example — the less of a positive effect you will have.

[...] For a civilized society, that should be enough, right? Helping out disadvantaged children at the point in their lives where it can do the most good is the obvious moral thing to do, isn’t it? As the authors note, “most analyses have cast the issue of assisting children from disadvantaged families as a question of fairness or social justice.”

But not Heckman and Masterov. For them, the real challenge is that the U.S. economy is facing a looming shortage of skilled workers.

[...] Not only are the baby boomers becoming decrepit, but “educational attainment rates” are stagnating. “College-going rates have stalled out” and “the high school dropout rate has increased over time if one counts GEDs as dropouts, as one should, because GEDs earn the same wages as dropouts, and graduate from college at the same rate as dropouts.”

In short: The United States is faced with a dire crisis that needs no elaboration by tiresome moral or social equity considerations: “The growth in the quality of the workforce, which was a mainstay of economic growth until recently, has diminished.” So get those poor kids from single-family households in the ghetto some quality preschool care! We need better workers!

So America has traded leisure time and social supports for economic opportunity. But we don’t actually get greater opportunity out of the trade. And the penalty for failing social supports may be a worse economy. Meanwhile, a few smart investments can both help the worst off and increase prosperity for everyone.

Seems like now would be a good time to start having our cake and eating it too.

Tags: economy, Europe