The Twitter Revolution

So I got an article about Moldova's would-be "Twitter Revolution" published on Splice Today. You can read it here in its entirety.

How farm subsidies led to swine flu

Though scientists have not found the "smoking pig," as one person put it, Wired reports that at least some scientists seem reasonably sure that its fast mutation was the result of factory farming practices:

Scientists have traced the genetic lineage of the new H1N1 swine flu to a strain that emerged in 1998 in U.S. factory farms, where it spread and mutated at an alarming rate. Experts warned then that a pocket of the virus would someday evolve to infect humans, perhaps setting off a global pandemic.

The new findings challenge recent protests by pork industry leaders and U.S., Mexican and United Nations agriculture officials that industrial farms shouldn’t be implicated in the new swine flu, which has killed 176 people and on Thursday was formally declared a pandemic by the World Health Organization.

“Industrial farms are super-incubators for viruses,” said Bob Martin, former executive director of the Pew Commission on Industrial Animal Farm Production, and a long-time critic of the so-called “contained animal feeding operations.”

It's worth mentioning that factory farming gets a huge boost from US crop subsidies [pdf], since the largest input in raising animals is the food necessary to feed them. Obama has claimed to be against farm subsidies, but in reality his call to end $100 million worth of them is nothing compared to the tens of billions that the federal government spends every year to subsidize big agriculture, the meat industry, and fast food restaurants. When you think about it that way, swine flu is actually one of the more benign outcomes of farm subsidies.

Dubai as a giant bubble

The Toronto Star has an interesting article on Dubai called Dubai: How not to build a city. It's interesting throughout, but something that stuck out was this part:

It's Abu Dhabi, back down the road, that has the vast bulk of the U.A.E.'s oil reserves – 95 per cent. Dubai has less than five per cent, and it is not expected to last more than a decade. The economy relies on real estate, tourism and Abu Dhabi, the emirate that is reported to have invested upwards of $10 billion (U.S.) in Dubai's economy.

You always hear that Dubai's wealth is a sort of anti-Dutch disease (this idiot was saying it last year), whereby the oil ran out and the rulers had to get smart, and they turned their economy into a wealthy trading state. But is it possible that the entire city and economy of Dubai was just an Abu Dhabi-inflated bubble?

The myth of American guns in Mexico: debunked

Radley Balko at Reason's blog offers a corrective to the myth circulating recently that the vast majority of weapons used by drug cartels in Mexico come from America. Apparently not only is that not true, but it seems that a similar number of guns leak out of the Mexican police force itself (which is increasingly funded by...yep, you guessed it, the US government!).

From Hillary Clinton to Diane Feinstein to Bob Schieffer to the New York Times, gun control opponents keep repeating the claim that 90 percent of the guns recovered in Mexico's drug war were sold in the United States.

William La Jeunesse and Maxim Lott say it just isn't true. As it turns out, the 90 percent statistic actually concerns only those guns Mexican authorities sent to the U.S. for tracing. [...]

But that's not what gun control proponents have been saying. They've been saying nine of 10 guns used in all Mexican drug crimes came from the U.S. That number, La Jeunesse and Lott report, is closer to 17 percent. [...]

The report explains that most of the weapons used by Mexico's drug cartels are actually illegal in the U.S. Even if they weren't, it makes little sense to suggest drug cartels are going through the hassle of sending thousands of "straw buyers" across the border to legally purchase guns in America when more powerful black market weapons are available from Russia, South America, China, and Guatemala without the bureaucracy and risk of registration.

Regulatory capture in P2P lending

Via The Browser, this article from some Slate affiliate has an excellent example of regulatory capture in action in the peer-to-peer lending industry.

For those of you unfamiliar with the concept, essentially it's a broker who facilitates loans between regular people over the internet. There's also a sort of charity version of this – Kiva – but the difference between P2P lending and Kiva is that Kiva doesn't return a profit for lenders whereas P2P lending generally does, and also P2P lending is often from people in rich countries to people in rich countries, whereas Kiva has people in rich countries lending to those in poorer ones.

But anyway, it looks like these P2P sites like Prosper and Lending Club return relatively high profits to lenders (7-9% are the quoted figures) with very low (>1%) delinquency rates. One forward-looking company, Lending Club, realized that regulation was imminent, so they did what any prudent firm does faced with the incentives of imminent-yet-malleable regulation: they tried to co-opt them for their own benefit, and it looks like they succeeded:

With venture capital money behind it and a high-powered team of former executives from American Express, Goldman Sachs, MasterCard, and E*Trade, [Lending Company] decided to be proactive and hired lawyers who reached out to the SEC in early 2008. "We wanted to help define the space, to participate in the dialogue about how our industry would work, and how it would be regulated," CEO Renaud Laplanche says. "Because we really expect this business to grow huge in coming years, and we wanted to be sure everything was done right." [...]

In April of 2008, Lending Club registered with the SEC and accepted the somewhat daunting task of filing every single loan with the SEC as a security. Starting in October—just in time for the global economic meltdown—Lending Club went online with full federal approval and all paperwork duly filed. Laplanche told TBM that the process has now been mostly automated; the same technology that enables his company to replace a traditional bank or collection agency allows it to make regular automatic filings through the SEC's EDGAR filing system. While there was some initial pain and expense, he thinks they are far outweighed by the potential of the business.

So now Lending Club is quickly gaining ground on the hogtied Prosper and Loanio. While its main competitors twiddle their thumbs waiting to get back into business, the company has facilitated more than 3,000 loans for $30 million.

So basically, because they were the first ones to ask about the rules, they were the only ones not blind sighted by them, and so they get to do $30 million in competition-free business. Now, some could say that that's their reward for being good corporate citizens and proactively seeking out regulation, but then again, I don't think it's a coincidence that they also happen to have "venture capital money behind it and a high-powered team of former executives from American Express, Goldman Sachs, MasterCard, and E*Trade." I'm not sure that stacking the game in favor of incumbents with deep pockets is really the best way to encourage innovation.

The Nation editor Katrina vanden Heuvel: Putin apologist and all-around idiot

Michael Moynihan at Reason's blog shares with us video of an appalling performance by The Nation's editor and publisher (as in, the most important person at the magazine) Katrina vanden Heuvel, who dismisses critics of Putin with regards to journalistic freedom by noting The Nation's ties with Novaya Gazeta, saying "they're thriving." Uh, I guess if you ignore the constant threats to their journalists' lives by the Kremlin.

She even has the gall to blame "the neo-Nazi groups" for the Novaya Gazeta lawyer and journalist killed recently in Moscow. Funny, because her dear friends at Novaya Gazeta have a distinctly different take on the murder:

In the opinion of the Novaya Gazeta staff, of which I am a member, the Russian security services or rogue elements within these services are the prime suspects in the murders of Baburova and Markelov. The boldness of the attack by a single gunman in broad daylight in the center of Moscow required professional preliminary planning and surveillance that would necessitate the security services, which closely control that particular neighborhood, turning a blind eye. The use of a gun with a silencer does not fit with the usual pattern of murders by nationalist neo-Nazi youth groups in Russia, which use homemade explosives, knifes, and group assaults to beat up and stab opponents to death.

Update: Here is an article from 2006 by Katrina vanden Heuvel, arguing that the American and British media were unfairly biased against Russia in their fairly unanimous opinion that Putin or his coterie were behind Alexander Litvinenko's radiation poisoning. Honestly – how dense can you be?

More on the second-generation biofuel scam

Counterpunch has more on what I think ought to be a bigger story: the ongoing failure of subsidized "green" energy sources. This one's about cellulosic ethanol, an "advanced" or "second-generation" biofuel, which promises all the energy independence and environmental cred that the first ethanol (corn ethanol) boasted (of course, it had neither), with the added benefit that it's not produced from food crops so it won't cause food prices to spike across the world (also not entirely true). Anyway, here is the article, and here is an earlier article in Counterpunch about basically the same thing (though I think the more recent one is better).

Here's a pretty long excerpt about the eternal promise that commercially viable non-food biofuels are "just around the corner":

Of all the people on that list, Lovins has been the longest – and the most consistently wrong – cheerleader for cellulosic fuels. His boosterism began with his 1976 article in Foreign Affairs, a piece which arguably made his career in the energy field. In that article, called “Energy Strategy: The Road Not Taken?” Lovins argued that American energy policy was all wrong. What America needed was “soft” energy resources to replace the “hard” ones (namely fossil fuels and nuclear power plants.) Lovins argued that the U.S. should be working to replace those sources with other, “greener” energy sources that were decentralized, small, and renewable. Regarding biofuels, he wrote that there are “exciting developments in the conversion of agricultural, forestry and urban wastes to methanol and other liquid and gaseous fuels now offer practical, economically interesting technologies sufficient to run an efficient U.S. transport sector.”

Lovins went on “Some bacterial and enzymatic routes under study look even more promising, but presently proved processes already offer sizable contributions without the inevitable climatic constraints of fossil-fuel combustion.” He even claims that given enough efficiency in automobiles, and a large enough bank of cellulosic ethanol distilleries, “the whole of the transport needs could be met by organic conversion.”

In other words, Lovins was making the exact same claim that Midgley made 45 years earlier: Given enough money – that’s always the catch isn’t it? – cellulosic ethanol would provide all of America’s transportation fuel needs.

The funny thing about Lovins is that between 1976 and 2004 -- despite the fact that the U.S. still did not have a single commercial producer of cellulosic ethanol -- he lost none of his skepticism. In his 2004 book Winning the Oil Endgame, Lovins again declared that advances in biotechnology will make cellulosic ethanol viable and that it “will strengthen rural America, boost net farm income by tens of billions of dollars a year, and create more than 750,000 new jobs.”

Lovins continued his unquestioning boosterism in 2006, when during testimony before the U.S. Senate, he claimed that “advanced biofuels (chiefly cellulosic ethanol)” could be produced for an average cost of just $18 per barrel.

Food fact of the day: Goat edition

According to the NYT, goat is the "most widely consumed meat in the world." I can't find any other corroboration (admittedly I didn't look that hard) except another NYT article from two years ago.

A possible explanation for the American and Spanish property bubbles

From an interesting post at The Money Illusion, we find this novel explanation for the housing bubble, which manages to answer that pesky rejoinder, "But why did Spain have a real estate bubble, too?" (Then again, I don't think immigration to Iceland has been especially strong lately...)

The housing bubble in 2004-2006 was partly driven by rapid immigration from Latin America (as was the bubble in Spain itself!), and also by a perception (which turned out false) that coastal zoning constraints were spreading into interior markets. Many Hispanic immigrants were snapping up older ranch houses, allowing native born Americans to move on to bigger McMansions. The immigration crackdown in 2007 dramatically slowed this immigration (as did the worsening economy.) Population growth estimates going several years forward fell sharply, hurting housing speculators. Ground zero of the sub-prime bust is in working class areas of the Southwest and Florida. Any guess as to who bought homes in those areas?

Central America escapes the violence of the drug war, but not for long

Stratfor's been quite good in covering the American drug war emanating in Mexico and radiating outwards, and they've got a great article about the movement of the drug war into Central America. Essentially, way back in the day, Colombian cocaine would go directly to the US, through points in South Florida, but that was eroded by stepped up enforcement in the area. After that, Mexico became a popular transshipment point, as drugs would fly/swim directly from Colombia to Mexico, from which they would be smuggled across or under America's southern border, and into the largest drug market in the Americas.

However, the perpetual whack-a-mole game continues. Mexico and Colombia have cracked down on the direct shipments, so now Colombia cocaine is taking a more circuitous route to Mexico, overland (or by short-haul air or coast-hugging boats) through the countries of Central America into Mexico. As Stratfor notes, the region has luckily avoided the violence normally associated with the drug trade, and the analysts at Stratfor claim that essentially the reason is that those governments have not been fighting the drug smugglers, and so there's been little violence. This is in line with the constant refrain from anti-drug prohibitionists that it's prohibition and enforcement that causes the violence, not the trade itself.

First, most governments in Central America have yet to launch large-scale counternarcotics campaigns. The seizures and arrests that have been reported so far have generally been the result of regular police work, as opposed to broad changes in policies or a significant commitment of resources to address the problem. More significantly, though, the quantities of drugs seized probably amount to just a drop in the bucket compared to the quantity of drugs that moves through the region on a regular basis. Because seizures have remained low, Mexican drug traffickers have yet to launch any significant reprisal attacks against government officials in any country outside Guatemala. In that country, even the president has received death threats and had his office bugged, allegedly by drug traffickers.

Sadly, the US is not content to leave Central America out of this increasingly bloody war:

For one thing, the Merida Initiative, a U.S. anti-drug aid program that will put some $300 million into Mexico and about $100 million into Central America over the next year, could be perceived as a meaningful threat to drug-trafficking operations. If Central American governments choose to step up counternarcotics operations, either at the request of the United States or in order to qualify for more Merida money, they risk disrupting existing smuggling operations to the extent that cartels begin to retaliate.

It's also relevant to remember that this recent surge in drug-related violence in Mexico and along the border is directly related to crackdowns by the Mexican government in recent years, largely at the behest of the Americans.