Pieter Hilhorst actually took the pain to read my work:
Sorry but this is an extremely funny and right on target blogpost by Willem Buiter:
Generally I do not support the positions of Geert Wilders and his Freedom Party. Actually, I find his party’s success in popular polls and the June 4 election for European Parliament quite nauseating. But I do not object to the Freedom Party’s request to outline the costs and benefits of immigration. It may in fact help to improve current integration policies. After all, meten is weten.
It’s not a very elegant analogy, but one reason crime rates in New York City are down so spectacularly is because the NYPD started to collect detailed statistics on the crime rates per neighborhood on a weekly basis. Maps of crime trends help the police department decide how, when and where to deploy its officers.
The bottom-line is that immigration can be beneficial to society, as long as you help immigrants to make best use of their talents. New York City mayor Mike Bloomberg calls immigrants “the lifeblood” of the City and their contribution “beyond measure”. New York’s immigrant community has very little unemployment and very low crime, particularly the undocumented (illegal) immigrants.
Mike Bloomberg knows best. After all, the mayor is a smart business man. In 1981 he founded Bloomberg LP, a 25 billion dollar financial news organization that employs more than 10,000 people in over 135 offices around the world. Bloomberg’s personal net worth is an estimated 16 billion dollar, according to the most recent Forbes 400 ranking. That makes him the richest man of New York City and the eighth-richest American.
So don’t trust my word on immigration. Trust Mike Bloomberg’s.
Crime rates in New York City keep dropping like autumn leaves despite having fewer police officers on the streets. The New York City Police Department (NYPD) will shrink to little over 34,000 officers within a year, compared to 41,000 officers a decade ago. The crime rate fell from 10,000 crimes per 100,000 people in the late eighties to 2,000 crimes per 100,000 people last year. Murders, which hit 200 on July 1, are heading toward a fresh low. In 1990 the murder rate reached its peak at more than 2,200 murders a year. If New York City were to end this year with 400 murders or less, its murder rate will be quite comparable to that of Amsterdam (which hit 35 in 2005) and Rotterdam. Much will depend on the weather, it seems. According to a recent New York Times article, the number of killings in the City rises with the heat. And there are fewer homicides on a rainy day as well.
The ever-dropping New York murder/crime rate is remarkable in a number of ways:
1. New York City has fewer police officers than Amsterdam (34,000 police officers for a population of 9,000,000 compared to 6,000 police officers for a population of 900,000);
2. One would expect an exponential rather than a linear relationship between murder rate and a city’s population size;
3. New York City is bound by the constitutional right to keep and bear arms despite every New York City mayor opposing it (including Rudi Giuliani, before he ran for president).
If the murder rate hits a record low this year, we may have to thank the crappy weather for it. Last month was the coldest and wettest June on record.
After today’s earnings report, Goldman Sachs employees may be eligible for average pay packages of as much as 900,000 dollar. Second-quarter earnings reported today were up 65 percent compared to 2008, totaling 13.76 billion dollar. Last year the average pay package at the Wall Street bank was a mere 363,000 dollar.
Last month Goldman Sachs repaid 10 billion dollar of government aid (TARP) that it received after the collapse of Lehman Brothers in September 2008. As I suggested in Friday’s column, Goldman Sachs may have done so in order to get rid of the US Treasury’s interference with its pay practices.
However, Goldman Sachs also received 14 billion dollar from AIG, after the US government came to the insurance conglomerate’s rescue with 178 billion dollars. No word that it will repay that money to the US government as well.
Following earlier statements by Zhou Xiaochuan of the People’s Bank of China in March, China renewed its criticism of the dominant role of the US dollar as a global reserve currency at the meeting of the G-8, The Financial Times reports today. In front of President Obama, the Chinese state councilor Mr Dai unequivocally called for the world to diversify the reserve currency system. The country that holds an estimated 2 trillion dollar in U.S. T-bills clearly doesn’t shy away from using its leverage in the international political arena.
The Financial Times reports today that investment banks, including Goldman Sachs and Barclays Capital, are inventing new schemes to reduce the capital cost of risky assets. Financial innovation, which brought about the current economic crisis, is far from dead.
Instead of shifting risk to the economic agents and institutions most willing and able to bear risk, financial shifted risk to the imprudent, the reckless, and the fraudulent. As recent history showed us, this may cause costly financial crashes, defaults and bankruptcies. As Willem Buiter pointed out in his Maverecon blog, financial innovation does not only distribute risk in the economy inefficiently, but also increases the total quantum of risk as it increases the likelihood of abnormal times—panics, manias and crashes—occurring, and the scope and severity of financial crises.
The CIA has established a special unit to investigate economic and financial threats to the United States’ security. The unit sends President Obama daily briefings with an assessment of the economic risks. In March the Department of Defense already organized an economic war simulation. The Pentagon invited hedgefund managers, bankers and economic scholars to assess different scenario’s that might shift the balance of power in the world. Quelle surprise… China turned out to be the smartest economic warrior. Perhaps China’s decision to accumulate over two trillion dollar in foreign currency reserves wasn’t such a blunder after all.