Give the anti-globalization protestors their due. After the Battle in Seattle, most of the claims of most of the protestors were dismissed by the commetariat within the space of a single op-ed column. Five years later, they've managed to convince a fair fraction of the globe of the correctness ofd their ideas.

The result has been a raft of books devoted to debunking the myriad claims of the anti-globalization and alternative globalization crowds, some of which I've discussed here. However, September's international relations book of the month blows the other books in this category out of the water. Martin Wolf's Why Globalization Works is the best single book I've read to date that comprehensively addresses all of the claims and counter-claims with regard to economic globalization. It's the kind of book I wish I'd written. Go buy it. Now.

In light of recent events, today's general interest book is Margaret Wise Brown's Goodnight Moon. As one who's had to read a fair number of toddler books over the past years, I'll always have a soft spot for this one. Brown's The Runaway Bunny
is also good -- and Margaret Edson uses it to brilliant effect in the closing of Wit. And of course I love Maurice Sendak's Where the Wild Things Are. However, Goodnight Moon will always be my favorite to read out loud -- the cadences are just lovely.

However, opinions vary on this. So readers are invited to submit their favorite children's book for the under-five set.

Gary Washburn and H. Gregory Meyer report in today's Chicago Tribune that City Council opposition has succeeded in thwarting Wal-Mart's plans to open up a big box store in the South side of the city (for previous posts on this topic click here, here and here

Wal-Mart will continue work--for now--on plans for a new store on Chicago's West Side but will not pursue a proposed outlet on the South Side in the wake of wrangling and delays, the company said Tuesday.

While even free-market enthusiasts acknowledge that the effect of minimum wage laws is not cut and dried, I'm pretty sure even Alan Kruger would say that $12.43 would be a deleterious move. A $10 minimum wage with a grandfather clause would be equally bad. As for the content provision, well, that's just moronic.

As a south sider who would like to see more jobs and more commerce created in the neighborhood, I'd like to thank Alderman Joe Moore and Alderman Edward Burke for doing such bang-up jobs at public policy. If you'd like to thank them too, feel free to shoot an e-mail to Mr. Moore or an e-mail to Mr. Burke applauding them for their bold and imaginative contributions to urban planning and economic development!!

Much as I would like to blog about the Republican National Convention, I'm afraid danieldrezner.com will be pretty much silent for the next week. Part of this is due to the imminent arrival of 100th annual meeting of the American Political Science Association.

The more important reason is a personal one that I vaguely alluded to last week. There's a new addition to the family:

Lauren C. Drezner
seven lbs., zero oz.

With all due respect to Henry Farrell, this is undoubtedly my best co-authoured project for the last few years!!

Go read David Brooks' cover story for the New York Times Magazine on the future of both conservatism and the Republican Party (not necessarily the same thing).

Brooks opens with a point I've made in recent months:

There used to be a spirit of solidarity binding all the embattled members of the conservative movement. But with conservatism ascendant, that spirit has eroded. Should Bush lose, it will be like a pack of wolves that suddenly turns on itself. The civil war over the future of the party will be ruthless and bloody. The foreign-policy realists will battle the democracy-promoting Reaganites. The immigrant-bashing nativists will battle the free marketeers. The tax-cutting growth wing will battle the fiscally prudent deficit hawks. The social conservatives will war with the social moderates, the biotech skeptics with the biotech enthusiasts, the K Street corporatists with the tariff-loving populists, the civil libertarians with the security-minded Ashcroftians. In short, the Republican Party is unstable.

In sketching out the future governing philosophy of Republicans, however, Brooks offers some depressing words for libertarians:

If you want to put a death date on the tombstone of small-government Republicanism, it would be Nov. 14, 1995. That was the day the new G.O.P. majority shut down the government. Gingrich, Dick Armey and others came to power with a list of hundreds of government programs and agencies they wanted to eliminate, including the Departments of Commerce, Energy and Education. They led what Grover Norquist called the Leave Us Alone coalition, the alliance of all those different Americans who wanted government to get out of their lives. Gingrich vowed to show the world ''how to end programs, not just create them.'' Republicans welcomed a showdown over the size of government because they were convinced that the public would be on their side. Faxes came over the machines vowing, ''No Compromise.'' Senator Phil Gramm celebrated the shutdown. ''Have you really noticed a difference?'' he reportedly asked.

The public did notice, as it turned out, and they didn't like it. Within a few years the Republicans were backtracking so furiously they were proposing to spend more money on the Department of Education than the Clinton administration thought to ask for.

Read the rest of the piece to see the positive vision of government that Brooks offers, in the tradition of Hamilton, Lincoln, and TR. The essay probably offers the most articulate framework for understanding Bush's domestic policy agenda you'll see in the mainstream media. Then come back and post what you think.

[What do you think?--ed. I have a mixed reaction. The overarching philosophy of using government to expand individual choice is an undeniably appealing one. Policies like the earned income tax credit certainly fit into that category. However, I have caveats to Brooks' "progressive conservatism." While there's much discussion of what a conservative government can do, there's less about how it can do this. My inclination is to prefer that the government act more as paymaster than implementor, but I'm not sure Brooks would agree. The boundaries of the Brooksian state don't seem all that constrained. At the end, he argues that a good progressive conservative government could cut useless measures like corporate subsidies, farm subsidies, and needless tariffs. However, it's no coincidence that the intellectual godfather of modern-day protectionism is Alexander Hamilton. Finally, I just hate the phrase "progressive conservative." I understand what Brooks is going for, but it sounds like "pragmatic idealism" or "collective indivudualism."]

Almost exactly one year ago, the New York Times ran a story on China's growth into a world power, about which I blogged here -- I thought it made some stupid historical analogies.

Today Jane Perlez -- one of the Times' best foreign correspondents, in my book -- has a similar story. This one has no dumb analogies and a lot more meat on it:

These days, Australian engineers - like executives, merchants and manufacturers elsewhere in the region - cannot seem to work fast enough to satisfy the hunger of their biggest new customer: China.

Not long ago Australia and China regarded each other with suspicion. But through newfound diplomatic finesse and the seemingly irresistible lure of its long economic expansion, Beijing has skillfully turned around relations with Australia, America's staunchest ally in the region.

The turnabout is just one sign of the broad new influence Beijing has accumulated across the Asian Pacific with American friends and foes alike. From the mines of Newman - an outpost of 3,000 in a corner of the outback - to theforests of Myanmar, the former Burma, China's rapid growth is sucking up resources and pulling the region's varied economies in its wake. The effect is unlike anything since the rise of Japanese economic power after World War II.

For now, China's presence mostly translates into money, and the doors it opens. But more and more, China is leveraging its economic clout to support its political preferences.

Beijing is pushing for regional political and economic groupings it can dominate, like a proposed East Asia Community that would cut out the United States and create a global bloc to rival the European Union. It is dispersing aid and, in ways not seen before, pressing countries to fall in line on its top foreign policy priority: its claim over Taiwan.

China's higher profile is all the more striking, analysts, executives and diplomats say, as Washington's preoccupation with Iraq and terrorism has left it seemingly disengaged from the region, which in turn has found the United States more off-putting and harder to penetrate after Sept. 11.

American military supremacy remains unquestioned, regional officials say. But the United States appears to be on the losing side of trade patterns. China is now South Korea's biggest trade partner, and two years ago Japan's imports from China surpassed those from the United States. Current trends show China is likely to top American trade with Southeast Asia in just a few years.

China's prime minister, Wen Jiabao, as much as threw down the gauntlet last year, saying he believed that China's trade with Southeast Asia would reach $100 billion by 2005, just shy of the $120 billion in trade the United States does with the region.

Mr. Wen's claim was no idle boast. Almost no country has escaped the pull of China's enormous craving for trade and, above all, energy and other natural resources to fuel its still galloping expansion and growing consumer demand. Though the Chinese government's growth target for 2004 is 7 percent, compared with 9.1 percent for 2003, few are worried about a slowdown soon.

Read the whole thing. It remains the case that China's power is only felt at the regional level -- and Perlex asserts rather than proves her argument about America disengaging because of the war on terrorism.

Still, it's worth chewing on.

Via Chris Betram, I took Chris Lightfoot's estimation quiz. He got a 39; I got a 40.

I'm guessing we're equally chagrined at our performance, however (I can't believe I was that far off on the GDP of Great Britain-- wait, yes I can: in my head I used the inverted exchange rate between the two currencies to get from dollars to pounds).

Go take it for yourself and report back.

Last month the Phillipine government's decision to evacuate all nationals out of Iraq after a truck driver was taken hostage. At the time, Arroyo said she was proud of her decision: "she was unrepentant Tuesday, saying the hostage, Angelo de la Cruz, had became a symbol of the 8 million Filipinos who have left their poor country to send home money from hard and sometimes dangerous work abroad." Arroyo subsequently banned Filipinos from working in Iraq.

According to the AP, it looks like some other Filipino symbols are somewhat upset with the Arroyo government:

Riot police used water cannons Friday to disperse protesters demanding that the Philippines lift its ban on allowing its citizens to go to war-ravaged Iraq for jobs.

The protesters marched to the presidential palace to urge President Gloria Macapagal Arroy to let them leave for Iraq, where they said U.S. military contracts await them.

"Your concern for us is highly appreciated but we need cash," one placard read. "Please allow us to work in Iraq," said another.

Riot police and rolls of barbed wire blocked more than 200 protesters at the foot of a bridge leading to the palace, where they sat down, linked arms, and sang religious songs, vowing to stay there until the ban is lifted....

"Most of us are going hungry here. If they can give us jobs here, then its OK, but they can't," said Danny Baloloy, a plumber who said a job that pays $650 a month awaits him at a U.S. base in Iraq.

The ban was imposed last month after a Filipino truck driver, Angelo dela Cruz, was abducted by Iraqi insurgents. He was freed after Manila pulled out its troops ahead of schedule, as demanded by the kidnappers.

About 3,000 Filipinos seeking jobs in Iraq last week also protested against the ban, saying they would rather risk their lives than face joblessness and hunger at home.

Via Glenn Reynolds, I see that James Lileks has a Jewish World Reviiew essay on John Kerry's ambition. Here's the key part of Lileks' thesis:

So why does Kerry want to be president?

The reason is almost tautological: John Kerry wants to be president because he is John Kerry, and John Kerry is supposed to be president. Hence his campaign's flummoxed and tone-deaf response to the swift boat vets. Ban the books, sue the stations, retreat, attack. Underneath it all you can sense the confusion. How dare they attack Kerry? He's supposed to be president. It's almost treason in advance.

There's something bothering me about this line of argument -- namely, that it applies with equal force to George H.W. Bush. Before he got elected in 1988, Bush Sr. was widely viewed as a resume looking for a position to fill. And he was a mighty fine president in my book.

I'm not saying that John Kerry is George H.W. Bush. I'm just saying that Lileks ain't persuading me.

UPDATE: Before adding a comment to this post, re-read it very carefully -- yes, that's right, I'm comparing Kerry to Bush 41, not to Bush 43.

Sarah Ellison has a must-read front-pager in today's Wall Street Journal. Well, actually it's only a must-read if you have small children -- if you don't, just skip to the next post.

David Wighton and James Harding report in the Financial Times that George W. Bush has alienated former supporters among the financial folks:

Wall Street's enthusiasm for US President George W. Bush appears to have cooled as the presidential race tightens and concerns grow about foreign policy and fiscal deficits.

Some leading fundraisers of Mr Bush's re-election bid have stopped active campaigning and others privately voice reservations.

The New York financial community is expected to give the Republicans a lavish welcome when the president's party arrives for its national convention next week. Wall Street has been a big contributor to Mr Bush's record-breaking re-election fund. But one senior Wall Street figure, once talked of as a possible Bush cabinet member, said that he and other prominent Republicans had been raising money with increasing reluctance. “Many are doing so with a heavy heart and some not at all.” He cited foreign policy and the ballooning federal deficit as Wall Street Republicans' main concerns.

A Republican in the financial services industry concurs. “Many of them may be maxed out,” he said, referring to campaign contributions that have hit the legal ceiling, “but they are backing away from Bush.”

The deficit has been criticised by Peter Peterson, chairman and co-founder of Blackstone Group, the New York investment firm, and former commerce secretary under President Richard Nixon. In his new book, Running on Empty, he accuses both parties of recklessness but attacks the Republican leadership for a “new level of fiscal irresponsibility”.

One New York dinner in June 2003 raised more than $4m, partly thanks to the efforts of Stan O'Neal, chief executive of Merrill Lynch. Yet Mr O'Neal has done no fundraising for the campaign at all since then and friends say he is not supporting Mr Bush. “He is best described as independent,” said one. Another senior Wall Street figure, who has given money to the campaign, said he was among many Wall Street bosses who were impressed with Mr Bush's handling of the September 11 attacks. “But since then, I have lost faith over foreign policy and tax,” he said.

Even those who are campaigning for Mr Bush sound increasingly defensive. “Whether or not you like him, you can't change leaders during a war,” said the head of one Wall Street firm.

This jibes with the disaffection felt with the Bush economic team by Republican-leaning policy wonks. And from the other side of the Republican spectrum, David Kirkpatrick reports in the New York Times that traditional conservatives aren't pleased with the Republican party platform (link via Noam Scheiber).

The interesting question will be whether any of this will affect the election. In another post, Scheiber asks the key question:

I don't know many Democrats who think right-wingers are going to end up defecting to Kerry. (Except for maybe a handful of libertarians living in Dupont Circle--but I don't think they're going to swing the election.) So the fact that 90 percent or more of GOP voters support Bush over Kerry is neither here nor there. The key question for the Bush campaign is what percentage of conservatives will end up staying home on election day. And I think its entirely plausible that a smaller fraction of self-described conservatives would vote for Bush if the election were held today than did in 2000--partly because Iraq isn't especially popular among Sunbelt isolationist types, and partly because of a handful of smaller greivances, like the budget deficit and the Medicare bill, and the brief flirtation with immigration reform and a mission to Mars.

Of course, it's important not to confuse D.C.-based conservatives with the much more electorally significant group of self-described conservative voters. (The D.C. breed is probably far more upset about the budget deficit and the Medicare bill, maybe Bush's too-grudging support for an anti-gay marriage amendment, too.) Still, I think there's a large enough group of conservatives out there who think Bush hasn't quite panned out for the Bush campaign to be concerned.

Kevin Canfield of the Newark Journal News thinks that op-ed columnists are overrated blowhards (link via NRO's The Corner):

Op-ed columnists are the self-assured know-it-alls of the political media. Shrugging off impartiality and other journalistic creeds in favor of partisan swagger, D.C.-centric op-ed columnists wield their various points of view with a degree of confidence known only to true believers.

Oh, wait, I got that wrong -- replace "op-ed columnist" with "blogger" and then you get Canfield's lead paragraph.

My point here is not (only) to pick on Canfield -- the substance of his story is to discuss the limits of the blogosphere's influence -- but rather to re-emphasize a point I made when George Packer's blog essay came out: "conduct a mental experiment -- replace the word 'blogosphere' with 'New York Times op-ed columnists' or 'David Broder. See if the criticism[s]... still hold up."

Also, it's not like there aren't theories out there explaining how blogs influence politics.

As I said in my previous post on the topic, Fred Kaplan really disliked Senator Roberts' intelligence proposal. Some highlights from his Slate piece:

Sen. Pat Roberts' plan to overhaul the U.S. intelligence bureaucracy is a true stinker, every bit as bad as his establishment critics contend....

Anyone who studies the "intelligence community" as much as Roberts does would also know—or should—that the proposal, if it were put into effect, would do more harm than good. So again, what's going on here?

....The first is that he's advancing a deliberately extreme proposal in order to prod the stuffy, stodgy bureaucracy into moving. He's telling the White House that if Bush doesn't start making serious reforms, Congress will—possibly in ways that the executive branch won't like. And he's shifting the definition of "acceptable" reform: By proposing a plan that goes well beyond the 9/11 commission's proposals, he is making those commission proposals seem more moderate by comparison....

However, there is a second, more cynical, and, alas, more plausible theory: He's putting out a proposal that's deliberately out-to-lunch, in order to distract the debate from more reasonable resolutions, to deflect attacks on Bush, and to discourage the whole idea of organizational reform.

I think it's safe to say that intelligence reform expert Amy Zegart really dislikes Fred Kaplan's take. She e-mailed me the following reaction:

I am, as my four-year old would put it, "steaming mad." Where to begin? First, anyone who has spent 5 seconds with Pat Roberts (and I spent 3 hours in front of him last week) knows he's deadly serious about reform. Where has Fred Kaplan been? Has he read the 500+ page Senate Intelligence Committee report Roberts' committee wrote in July about WMD in Iraq and the pathological deficiencies in the IC that led to it? Does he think this report descended like manna from heaven or does he realize the Committee's expert staff spent, oh I don't know, a year on it? I have anextra copy; perhaps I should send it to him.

Second, Kaplan forgets conveniently the fact that 2 of the key ideas in this proposal --splitting the CIA's clandestine side from its analytical side and creating a new national intelligence director -- were EXACTLY the same as a proposal made 12 years ago by David Boren and David McCurdy, the Democratic chairmen of the Senate and House intelligence committees. Then there is the substance of his claims. There are many valid concerns about this proposal, but Kaplan does not raise them.

Post your own thoughts below.

UPDATE: Esther Pan has compiled an excellent backgrounder on the different reform proposals at the Council on Foreign Relations web site.

Yesterday, Virginia Postrel posted and linked to several stories about a Public Policy Institute of California study on the effect of offshore outsourcing on the Californian economy. Postrel wrote, "The study found that outsourcing actually increases employment in California. Now the Assembly is sitting on the study."

The Assembly may have sat on the study, but it now appears to be available to the public. I clicked over to the PPIC web site and found the report by Jon Haveman and Howard Shatz, which is dated today. Some of their analysis sounds awfully familiar. The good parts (from p. 22-24):

[T]here is evidence that some California jobs eliminated by offshoring are similar to those likely to be created in the state by offshoring. Offshoring can allow the economy to reallocate labor and capital from one set of tasks to another set of higher-level tasks, and California has a strong supply of highly skilled workers who can take on these higher-level tasks. A second mitigating factor for the U.S. economy, and especially for California, is that there is growing world demand for the U.S. provision of services that are similar to those being sent offshore. This is a source of job creation for workers dislocated because of offshoring. California is a significant producer and exporter of these services, and this fact should ease the transition for affected workers in the state.

These two points suggest that jobs are being created in industries and occupations that are relatively similar to those being eliminated. For example, computer programming is one occupation that is projected to be negatively affected by offshoring, and evidence suggests that this is in fact the case. Between 1999 and 2002, 71,000 computer programmer jobs were eliminated, 23,000 of which were in California. Note, however, that offshoring is only responsible for a small fraction of these lost jobs; the technology bust explains most of them.

At the same time that opportunities for computer programmers were declining, more than 115,000 software engineering jobs were created, a disproportionately large share of which – 24,000 – were in California. The transition between these occupation categories – programmers and software engineers – may be unsettling but also may be easier than the transition between many other jobs, and the software engineering jobs pay over $10,000 more per year on average. It is certainly true that not all the workers who held computer programmer jobs became software engineers, and tracing how any such transition might have taken place is difficult. However, the decline of programmers and the rise of software engineers illustrates the fact that as old opportunities disappear – through economic cycles, technological change, and offshoring – the U.S. economy has the capacity to create better opportunities, and in this case, the skill sets required are similar.

As a result, the economy’s adjustment to this new phenomenon need not be as difficult as it was to the shift from manufacturing to service sectors in the 1980s and 1990s. Many of the workers displaced by offshoring have significant skills, and this bodes well for their future employment prospects. This observation is consistent with the evidence suggesting that workers with more skills have less difficult transitions to new jobs; the transitions are faster and involve less wage erosion. This is not to minimize the effect on workers who lose their jobs, especially less-skilled workers, but merely to put it in perspective....

An additional item is worthy of note. It is likely that “outstating” – outsourcing to another state – is a much more important phenomenon than is offshoring for California. The recent mass layoffs report of the Bureau of Labor Statistics noted that of the job relocations where the destination was known, more than 68 percent took place within the United States, rather than overseas. California companies have actively engaged in outstating back-office processes for years. These are the very same processes that are the most vulnerable to offshoring. It is possible that many jobs being moved offshore by California companies would have left the state anyway. Newspaper accounts in places such as Phoenix express the fear that back-office jobs that have only recently arrived from California are headed abroad.

I look forward to the California state legislature's efforts to impose a tariff on services from Arizona.

Here's the report's conclusion regarding the bills designed to block the offshore outsourcing of government contracts (from p. 31):

In the end, the policy of restricting government contractors to vendors employing only domestic labor falls short of the optimal choice in several respects. First, on a per worker basis, it is likely to be more expensive than other options. Second, it is likely to assist a very small subset of workers displaced by offshoring. Third, policies banning offshoring are most likely to assist relatively skilled workers with high earnings capacity. In this time of tight budgets, more cost-effective means of assistance are available and should be investigated.

Red Herring has more on the California situation. Daniel Weintraub concludes in the Sacramento Bee:

The bottom line, though the researchers don't put it this bluntly, is that politicians, either from ignorance or malevolence, are trying to scare Californians into believing that offshoring is bad for the economy, and bad for them. The reality is that the opposite is true, and that the proposals seeking to freeze the economy in place will do far more harm than good.

Indeed.

[Sure, that's California. The rest of the country is losing jobs, right?--ed. Not according to this Business Week story from earlier this month]:

Foreign investment for setting up U.S. subsidiaries and plants doubled, to $82 billion, between 2002 and 2003, according to the Commerce Dept. That means 400,000 new jobs, most of them tech-related, figures the Organization for International Investment, a trade association based in Washington, D.C. Over the same period, outsourcing has taken away about 300,000 U.S. jobs, according to tech consultancy Forrester Research. So, on a net basis, foreign outfits have actually added some 100,000 U.S. jobs.

There's plenty of incentive to keep the trend going. For starters, foreign companies often find that having a U.S. base can be a big help when selling to the lucrative U.S. market. That's one reason Fremont (Calif.)-based Infosys Consulting, a subsidiary of Indian outsourcer Infosys, plans to hire about 500 consultants -- most of them Americans -- over the next two years, says Basab Pradham, senior vice-president and head of worldwide sales....

As U.S. companies begin to outsource such mission-critical functions as human resources and finance, they still want to be able to coordinate and oversee such work more closely. "What we're beginning to witness is a change in the [offshoring] business model," says Wipro's [corporate vice-president of human resources Pratik] Kumar. "A lot of outsourcing companies used to be completely offshore. But as they've begun to handle more complex work, they find that they need to have more local expertise deployed."

UPDATE: Ashish Hanwadikar has more links on this.

Josh Elliott posts a fine rant in Sports Illustrated's blog about the Olympics that echoes my own thoughts on the matter:

No athletic event that is judged belongs in the Olympics.

And no exceptions: No gymnastics. No ice skating or boxing. No synchronized swimming or diving. If it can't be won on the track, in the lane lines or with one more goal than the other folks, it has no place in the world's premier festival of sport, one that purports to give us the world's greatest champions. For if a win can't be unquestionably achieved, what's it worth, really? Without an objective, inarguable method for determining victory and defeat, the very meaning of the competition is lost. (After all, this isn't my niece's toddler soccer league, where one team scores 49 goals and the other scores two, then the exhausted competitors are told, Saturday after disillusioning Saturday, that it was a tie.) Without an absolutely certain outcome, an event such as, say, the men's gymnastics all-around, isn't a sport at all. It's a talent show.

(Disclaimer for the knee-jerk brigade: The Blog is not impugning the wondrous athleticism of world-class gymnasts, platform divers and bantamweights. At the Olympic level, they are physical marvels, able to do things that most of us would find more torturous than exhilarating. Problem is, there's one thing none of them will ever do: definitively win their competitions.)

One could argue that there is some degree of subjective judgment in any sport -- umpires calling balls and strikes, officials determining if a runner jumped the gun, etc. However, it is exceedingly rare for the subjective elements in these sports to overwhelm the objective components. In gymnastics or ice skating, the entire competition is based on subjective judgments.

This doesn't mean that judged competitions aren't exciting. Gymnastics, diving, ice skating can be entertaining, and they demand physical excellence -- but they're not sports.

I fully recognize that this will never happen, but that doesn't change the fact that Elliott is right.

UPDATE: Hmmm.... I'm not sure Laura McKenna would approve.

ANOTHER UPDATE: Matthew Yglesias and Belle Waring weigh in with some counterarguments. Belle is misinterpreting my post in think that I was laying out a necessary and suifficient condition for an activity to be labeled a sport -- I was just articulating a necessary condition.

Matt raises an interesting point:

The trouble with the Olympic sports Dan objects to is that the quality of the athleticism on display is so uniformly high that human error is frequently the decisive factor. When you think about it, though, any basketball game that was seemingly decided by a last-second shot was always, in fact, decisively impacted by the inevitable human error in the officiating. The thing about the Olympics is that every gymnastics competition is like an extremely close game, because it involves several participants capable of near-perfection. If the competitors exhibited a very wide range of ability, small imperfections in the judging wouldn't matter, just as they don't matter in a blowout basketball game.

I'll confess one source of bias that went unmentioned in my original post: it could also be that the Olympic sports I consider to be dubious require musical accompaniment.

Bloomberg runs a story on an arcane policy entity called the Pension Benefit Guaranty Corporation that I fear will be making news in, oh, about five years:

The pension shortfall among U.S. companies may force the federal agency that insures retirement plans to seek a taxpayer bailout similar to the one during the savings and loan crisis, according to the Cato Institute, a policy research group.

The Pension Benefit Guaranty Corp. had a record deficit of $11.2 billion last year after taking over plans for 152 companies, including Bethlehem Steel Corp. and US Airways Group Inc.

Without changes to funding and premium rules, that deficit is likely to swell to $18 billion in the next 10 years and may reach more than $50 billion, said Richard A. Ippolito, who wrote the study for Cato, a policy research group, and is a former chief economist for the pension agency.

"If exposures create claims that reach catastrophic levels, taxpayers will be called upon to provide a bailout," Ippolito said.

Here's the link to Ippolito's study. From the abstract, this sounds like a classic moral hazard problem:

The Pension Benefit Guaranty Corporation, the federal agency that insures private-sector defined-benefit pension plans, had a surplus of $9.7 billion at the end of 2000 but a deficit of $11.2 billion at the end of 2003. Pension plan underfunding stands at more than $350 billion, which increases the likelihood that more pension plans will go under and taxpayers will eventually be called upon to provide a bailout.

The reasons for the PBGC's financial difficulties can be found in the structure of defined-benefit pension plans and in the way Congress set up the premium rules when it created the program in 1974. First, because the PBGC stands as the ultimate guarantor of companies' pension liabilities, plan sponsors have an incentive to invest their assets in equities rather than fixed-income securities of the same duration as the liabilities. Second, funding rules allow companies to make gradual contributions to their pension plans in the event of underfunding, which guarantees long-term exposure for the PBGC. Furthermore, when faced with higher contributions, companies have usually appealed to Congress to reduce the underfunding that they need to report, which reduces contribution requirements.

Unfortunately, Congress has failed to adequately address the problems of the PBGC. In temporary legislation passed in April 2004, Congress reduced the required contributions companies must make to their defined-benefit pension plans by an estimated $80 billion over two years by changing the formula used to calculate pension liabilities. Congress also provided additional relief of approximately $1.6 billion to steel and airline companies with heavily underfunded pension plans.

Rather than place the PBGC on sounder financial footing, those measures will likely worsen the agency's financial condition.

Read the whole thing.