Draw Breath

There are two interesting articles in today's Times, suggesting at major extensions of domestic law in response to globalisation. The first reports on the US Supreme Court's decision (though in odd circumstances) to allow a lawsuit to go ahead, under the Alien Tort Claims Act (see also here), of companies that collaborated with the Apartheid regime in South Africa. If lawyers establish that these companies knowingly assisted the South African regime in breaching human rights, they may be liable for millions of dollars.

Second, there's an article on the implications of corporations being found responsible for bribery in both developing and developed countries. It's always one of those things denied by the sorts of twats who advocate cutting aid to developing countries because of corruption: corrupters are just as guilty and they tend to be a lot closer to home. Certainly, the BAE probe was depressing, but corruption is very much coming onto the agenda. Again, the Alien Tort Claims Act may be start to be employed in interesting ways here. In which case, private action will emerge as one of the major sources of regulation of globalisation.

I'm sure, like me, you spend most of your waking hours speculating as to why it is that Boeing is doing so much better than Airbus. Of course, to a large extent it has to do with the weakness of the dollar and with the spectacular governance near-meltdown of EADS, Airbus's parent company.

But don't underestimate the power of government intervention. There is of course the thorny issue of who pisses highest (or lowest) on the subsidies wall (see also here and here).

And then there's all that military revenue...

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Good post over on Brad deLong's blog that gives a parallel perspective to the one I gave here.

According to the people deLong quotes, we have to see the subprime crisis in the context of new modes of banking, rather than in the more traditional terms of banking that have held up until now.

I've spoken before about the evidence on how SUV drivers, having exported the risks to people outside their cars, tend to drive more recklessly. Not that this makes SUV drivers a particularly unique demographic: for instance this graph suggests that, if anything, the introduction of mandatory seatbelt-wearing led to a worse situation than would otherwise have been the case in terms of overall deaths: the reduction in driver deaths was more than matched by a the growth in pedestrian and other deaths. As the study from which the graph was taken says, "to compel a person to use protection from the consequences of hazardous driving, as seatbelt laws do, is to encourage hazardous driving."¹

So. What has this got to do with the ongoing subprime crisis? Well, they're both stories about risk.

I see that Maria Farrell has posted some depressing news on the Irish economy over on Crooked Timber. It seems that 2006 final quarter net exports fell 10% year on year, with housing stalling too.¹ Even though I'm a person who, to coin Nick Cohen's phrase, has forecast ten out of the last three recessions, I suspect Maria's spot on. An economy reliant on equity-lead consumer demand is in very deep shit indeed.

How deep is a difficult question though. And this question matters very much for Belfast too.