Monday, September 15, 2008

Krugman on French Health Care

Paul Krugman writes about ...

... tendency of Americans to assume that we’re by definition the best — the kind of attitude which lets people get away with warning –warning! — Americans that the likes of Hillary would give us French health care. (If only.)

The Socialists and Immigration

The PS apparently will not back regularization of the status of undocumented aliens in the future. None of the major position statements calls for regularization. Only the left of the party is willing to go as far as Jospin did in 1997.

Whipped by the Fat Tail

Statisticians speak of probability distributions with a relatively high likelihood of states far from the mean as having "fat tails." It seems that many of the distributions used to estimate risk in the financial world had fatter tails than the estimators assumed. The CAC40 is down 5.6% today, Lehman is bankrupt, Merrill Lynch has been eaten by Bank of America, and AIG is teetering. As we wait to see just how black this Monday will be on the U.S. stock exchanges, one thing is clear: there is no point in carrying on with the old economic debate. It no longer matters whether France will meet its Stability and Growth Pact targets or whether Trichet thinks he must keep interest rates high forever. We are now in an emergency, and the premium will be on innovative ideas, not eloquent defenses of orthodoxy. Perhaps it's fitting that the curse "May you live in interesting times" is attributed to a Chinese philosopher. We are living in interesting times, and the Chinese, pragmatists as well as philosophers, are sitting on a mountain of cash and in a position to pick up a lot of assets at bargain prices.