Daily Archives: February 4, 2020

The Last Time Democracy Almost Died

By Jill Lepore – American democracy, too, staggered, weakened by corruption, monopoly, apathy, inequality, political violence, hucksterism, racial injustice, unemployment, even starvation. “We do not distrust the future of essential democracy,” F.D.R. said in his first Inaugural Address, telling Americans that the only thing they had to fear was fear itself. But there was more to be afraid of, including Americans’ own declining faith in self-government.

“American democracy,” as a matter of history, is democracy with an asterisk, the symbol A-Rod’s name would need if he were ever inducted into the Hall of Fame. Not until the 1964 Civil Rights Act and the 1965 Voting Rights Act can the United States be said to have met the basic conditions for political equality requisite in a democracy. All the same, measured not against its past but against its contemporaries, American democracy in the twenty-first century is withering. The Democracy Index rates a hundred and sixty-seven countries, every year, on a scale that ranges from “full democracy” to “authoritarian regime.”

In 2006, the U.S. was a “full democracy,” the seventeenth most democratic nation in the world.

In 2016, the index for the first time rated the United States a “flawed democracy,” and since then American democracy has gotten only more flawed. True, the United States still doesn’t have a Rome or a Berlin to march on. That hasn’t saved the nation from misinformation, tribalization, domestic terrorism, human-rights abuses, political intolerance, social-media mob rule, white nationalism, a criminal President, the nobbling of Congress, a corrupt Presidential Administration, assaults on the press, crippling polarization, the undermining of elections, and an epistemological chaos that is the only air that totalitarianism can breathe.

Nothing so sharpens one’s appreciation for democracy as bearing witness to its demolition. Mussolini called Italy and Germany “the greatest and soundest democracies which exist in the world today,” and Hitler liked to say that, with Nazi Germany, he had achieved a “beautiful democracy,” prompting the American political columnist Dorothy Thompson to remark of the Fascist state, “If it is going to call itself democratic we had better find another word for what we have and what we want.” In the nineteen-thirties, Americans didn’t find another word. But they did work to decide what they wanted, and to imagine and to build it.

Thompson, who had been a foreign correspondent in Germany and Austria and had interviewed the Führer, said, in a column that reached eight million readers, “Be sure you know what you prepare to defend.”

It’s a paradox of democracy that the best way to defend it is to attack it, to ask more of it, by way of criticism, protest, and dissent. more>

The approaching debt wave

By Kaushik Basu – Over the last decade, the world economy has experienced a steady build-up of debt, now amounting to 230 percent of global GDP. The last three waves of debt caused massive downturns in economies across the world.

The first of these happened in the early 1980s. After a decade of low borrowing costs, which enabled governments to expand their balance sheets considerably, interest rates began to rise, making debt-service increasingly unsustainable. Mexico fell first, informing the United States government and the International Monetary Fund in 1982 that it could no longer repay. This had a domino effect, with 16 Latin American countries and 11 least-developed countries outside the region ultimately rescheduling their debts.

In the 1990s, interest rates were again low, and global debt surged once more. The crash came in 1997, when fast-growing but financially vulnerable East Asian economies—including Indonesia, Malaysia, South Korea, and Thailand—experienced sharp growth slowdowns and plummeting exchange rates. The effects reverberated worldwide.

But it is not only emerging economies that are vulnerable to such crashes, as America’s 2008 subprime mortgage crisis proved. By the time people figured out what “subprime” meant, the U.S. investment bank Lehman Brothers had collapsed, triggering the most severe crisis and recession since the Great Depression.

The World Bank has just warned us that a fourth debt wave could dwarf the first three. Emerging economies, which have amassed a record debt-to-GDP ratio of 170 percent, are particularly vulnerable. As in the previous cases, the debt wave has been facilitated by low interest rates. There is reason for alarm once interest rates begin to rise and premia inevitably spike.

Among emerging economies, India is especially vulnerable. In the 1980s, India’s economy was fairly sheltered, so the debt wave back then had little impact.

Today, India’s economy is facing one of its deepest crises in the last 30 years, with growth slowing sharply, unemployment at a 45-year high, close to zero export growth over the last six years, and per capita consumption in the agricultural sector decreasing over the last five years. Add to this a deeply polarized political environment and it is little wonder that investor confidence is rapidly declining. more>

Updates from Ciena

New decade, new challenges – your success will depend on having the right services partner
Technologies like 5G, IoT and streaming everywhere are bringing monumental change to your network. You need a trusted partner with a consultative approach and the right expertise to navigate this complexity. This is where Ciena Services comes into play, says Ciena’s Kevin Baranowski.
By Kevin Baranowski – We are moving into a new decade that promises to bring monumental change in how our world connects, both people and machines. As Ciena CTO Steve Alexander recently highlighted in his predictions for 2020 and beyond, this change is coming in the form of 5G connectivity, AR/VR, IoT, streaming everywhere, virtualized services, and more.

This immense impact on both the network and the ecosystem around it has no better example than 5G. The additional bandwidth, lower latency, and guaranteed end-to-end network performance that 5G will bring to the market is vast. Getting bandwidth to your phone at speeds of 1Gbps and beyond will allow you to stream higher def shows and sporting events. Much lower and guaranteed latency will enable AR/VR and mobile esports. These significant improvements in end-to-end 5G network performance will result in a much better customer experience, as well as new revenue-generating opportunities for service providers.

But this also requires a much denser cell site footprint than ever before. Also, it does not mean you no longer have to support 3G or 4G networks, which will be required for many years to come. 5G network planning is critical. How do you pick the proper locations to build your cell site that are not only close to the fiber plants that you have, but also close to the targeted population centers? Put the cell site in the wrong place and you miss the traffic you are looking to capture. Put it too far away from your current fiber plant and you have added expense in hardware required to deliver the service. more>


Updates from Chicago Booth

When rich folks move downtown, inequality gets worse
By Victor Couture, Cecile Gaubert, Jessie Handbury, and Erik Hurst – As the rich in the United States get richer, they have been moving from the suburbs to downtown, boosting the demand for luxury amenities. While this process of gentrification has long been decried for pushing out poor people, it also measurably worsens income inequality, according to University of California at Berkeley’s Victor Couture and Cecile Gaubert, University of Pennsylvania’s Jessie Handbury, and Chicago Booth’s Erik Hurst.

The researchers analyzed US Census data from 1970, 1990, and 2000, along with the Census Bureau’s American Community Survey from 2012 through 2016. They find not only that the income gap between the wealthiest 10 percent and the poorest 10 percent widened by 19 points over 1990–2014, but also that gentrification contributed another 1.7 points to that gap.

This additional welfare calculation addresses the economic fallout for poorer residents, who had to pay more for downtown housing as the influx of wealthy residents drove up prices at restaurants and bars, along with the cost of entertainment and personal services. “Poorer residents, who are mostly renters,” the researchers write, “have a choice between paying higher rents for a bundle of amenities that they do not value as much and moving out of downtown.” more>