Yet again, it’s time for the thoughts you’ve been accumulating over the weekend to be spread before the select audience of Quiggin blogreaders. Anything goes, but the question that’s been worrying me for the last few days is “What is to be done about North Korea?”. I’ll be posting on this soon, so you may want to comment when I do, but if you’ve got a brilliant plan, I’d love to see it.

As always, civilised discussion and no coarse language.

This piece from the Oz discusses divisions within the US Administration over whether to release intelligence information. The story is attributed to the Sunday Times, but I couldn’t find it at their site. The discussion is pretty much identical to my posts of last week, which Ken Parish dismissed as ‘ridiculously premature’. On the assumption that bloggers are entitled to be more speculative than mainstream media like The Times, and that no-one wants to read blog speculation that lags what’s already in print, I’d say I published just in time. Here’s the Oz

Washington’s apparent reluctance to produce what it has claimed is “solid” evidence of Iraqi transgressions has fuelled speculation that the intelligence is flawed or owes more to propaganda than genuine information.

Scepticism has been fuelled by uneventful inspection visits to several nuclear and biological sites that were previously identified as suspect by the US or Britain. UN officials have so far not disclosed any serious irregularities. British officials admit the intelligence they have seen is not as dramatic or as easy to publish as the satellite photos that exposed the presence of Soviet missiles in Cuba.

“The evidence is assembled from random bits and pieces, quite a lot of which cannot be explicitly revealed,” an official said. “It adds up to a picture we are confident of.”

The Oz observes

Spreading that confidence to a wider public is beginning to prove a problem

I can only agree.

In my link to Electrolite I wrongly described it as a joint project of Patrick & Teresa Nielsen Hayden. Actually, it’s just Patrick. Teresa has her own blog, devoted to ” Language, fraud, folly, truth, history, and knitting. Et cetera.” Check out yet another online quiz, a better-than-average one about Science fiction writers

This piece on unpaid overtime gives more support to my view that the alleged boom in productivity in Australia is largely driven by increases in the pace of work and by unrecorded increases in working hours.

The NYT has an interesting interview with Jeffrey Sachs who’s moved his sphere of concern from Eastern Europe (where he was a prominent advocate of ‘shock therapy’) to the Third World, where he is pushing with some success for more, and more effective, aid programs particularly with respect to AIDS and malaria.

I mentioned The Economist’s praise for the US system of Chapter 11 bankruptcy a few posts ago. This close-up look from the NYT doesn’t go so far as to deny the superiority of the US approach, but it is certainly a more jaundiced view.

The NYT also mentions an auction-based proposal by well-known economists Hart and Moore. Auctions are where the action is in economics nowadays, and I am edging into the field myself.

I’ve mentioned before that Ozplogistan is more politically balanced than it was in ancient times (that is, June 2002). Two additions to the blogroll maintain the balance. Stewart Kelly is generally left of centre, while the self-explanatory Wog Blog is generally right of centre.

On the US scene, I’ve already linked to Patrick & Teresa Nielsen Hayden’s excellent Electrolite, and now I’m adding them to the blogroll.

And I should mention that David Morgan is back, after a prolonged absence due to new fatherhood. He’s had some excellent posts on the Windschuttle-Reynolds row recently.

The Lovely Bones by Alice Sebold. Weird, but moving, it’s narrated from heaven by a 13-year old murder victim.

Also England Under the Tudors by GR Elton, reprinted in the Folio History of England series. Some striking numbers are that the population of England at the time was around 3 million and that the King’s annual revenue was less than 100 000 pounds. Here are some thoughts on this.

(a) Given that 80 or 90 per cent of the population were peasants who had no real chance of an education, the pool from which English governments drew their talent was smaller than that available to a lot of city councils in Australia. Did this make a difference?

(b) Estimating Mr Darcy’s income, Brad DeLong says, with suspicious precision, “In 1810 the pound had a present-day value of £27.28”. As I recall there was a fourfold inflation following the discovery of the New World goldmines, so lets say that the price level has risen 100-fold since Tudor times. This gives a government budget of around 10 million pounds per year or $30 million Australian dollars, which is less than it costs to run a medium-sized university.

On a related theme, Brad riffs off Virginia Postrel’s observation that

CHEAP STAPLES: I bought a five pound bag of Gold Medal flour yesterday for 69 cents. I find that amazing.

to estimate a 400-fold improvement in standards of living since the 16th century.

Over 500 years, this would imply a doubling time of around 60 years or, using the rule of 70, an annual growth rate in income per capita of about 1.2 per cent . I think this overstates things a bit because the relative price of food has been declining at least for the past century, suggesting more rapid productivity growth in agriculture than in the economy as a whole. However, some of the price decline is due a lower income elasticity of demand reflecting the finite capacity of the human stomach – the treatment of this is complicated.

In the comments thread to my post on the Lott fiasco, Jason Soon raised an interesting issue (I think I saw a similar point in another blog somewhere, but omitted to link it. )

Does Strom Thurmond himself think America would be a better place if he had won in 1948? It would certainly raise my opinion of him if he came out and said without equivocation that he deserved to lose.

This report in the NYT is notable, not for its content but for the fact that it’s the first time I’ve seen the Times use the term “current account deficit” without some explanatory gloss such as “the broadest measure of the trade deficit”. The NYT is not alone on this – the only other paper I’ve seen even report CAD statistics is the WSJ and it usually has a gloss.

For Australian readers of a certain age, the rise to prominence of the CAD will be all too familiar. The high interest rates of the late 1980s and the ensuing recession were largely motivated by concern about the CAD, though every historical point is bitterly disputed. Even today, no Australian tabloid would have any qualms in reporting the CAD and assuming its readers had a general idea what it was.

As this report from the Bureau of Economic Analysis shows, the CAD is now at 5 per cent of US GDP and shows no sign of declining, despite the recent deprecation of the dollar. Although economists are more relaxed about deficits than they were a decade ago, this is still dangerous territory.

One reason US commentators have ignored the CAD is the fact that, although the US is a net debtor, the deficit on income payments is still quite small – only $3 billion in the last quarter. So the CAD is not much different from the balance on goods and services. But with deficits at 5 per cent of GDP, the magic of compound interest will start to work before long. Expect to see this statistic make the move from the business pages to the front pages in the near future.