Diary of Lady Shelburne - 3rd Post

This is the third set of entries from the diary of Lady Shelburne, written in 1766-69. Other posts in this series are listed in the panel at the right. As before, the entries come from the Fitzmaurice biography of the Earl of Shelburne.

They span 10 days during the first half of January, 1766, and were written just 11 months after Sophia's wedding. She was now 20 years old. Her husband, Lord Shelburne, was eight years older and politically ambitious. When she wrote this entry, he had recently refused to become President of the Board of Trade because he opposed the current government's policy of taxing the American colonists. In the coming year he would become Secretary of State for the Southern Department in the next ministry, that of William Pitt. There's a useful timeline of events of this time at the web site for a course called Resources for English Literary Studies at George Mason Univ.

Here's the set of entries:

January 4th [1766] - Lord Shelburne came up to me early and read some of Thucydides' History of the Peloponnesian War. We were particularly struck with his funeral oration to the surviving friends of the Athenians killed in the first war.

January 5th - Lord Shelburne came up to me soon after breakfast and read part of a sermon of Abernethy's. He was called away by company, and Mr. Townshend made me a visit whilst Mr. Dunning was with my Lord.

January 10th - Lady Louisa Fermor told us at breakfast a very genteel repartee of Mr. Greville's to the Duke of Gloucester, who was accusing Lady Waldegrave of affectation for pretending to be ill and looking so well, to which she answered that her's was such an apple face that it never looked sick. "What do you mean by an apple face?" says the Duke of Gloucester. Mr. Greville who stood next her, and saw her at a loss to explain it, answered for her, "A nonpareil, Sir." After breakfast Lord Shelburne lent me a little book called Le Siècle d'Alexandre and I saw him no more till dinner, to which came Colonel Barré. After it I received a short visit from Lady Mary Hume. When she was gone to her other engagements and Lady Louisa to Princess Amelia, Lord Shelburne, Colonel Barré, and Mr. Fitzmaurice came to me and staid till near nine, when the two last went to Northumberland House. We all supped together, and Lady Louisa told us Miss Emily Hervey had run away with Mr. Cope, brother to Mrs. Walker.

Sunday, January 12th - Lady Louisa went early to St. James's Chapel, and breakfasted with Lady Charlotte Finch. At our breakfast came Dr. Leigh, an American, and Mr. Taylor, who desired Lord Shelburne to assist the Petition he is to present to the House of Commons concerning the Wells election, which he declined on account of not choosing ever to interfere with the decisions of that House. After they were gone I went to see Lord Fitzmaurice, and at my return to my own room I found in it Lord Shelburne talking to a Mr. Case about the construction of pondheads, and desiring him to look at that Mr. Brown is constructing at Bowood on his way to Lord Egmont's, where he works. He went away and Lord Shelburne read me two sermons before he went out. Governor Vansittart, Mr. Sulivan, Colonel Barré, and Captain Howe dined here. Lady Juliana Penn call'd in the evening. The gentlemen came up to drink tea, and after it Lord Shelburne went out with them and returned to supper. In the meantime Lady Louisa entertained me with reading to me some former letters of Lady Anne Dawson's.

January 13th - Lord Shelburne read to us a paper concerning the Stamp Act in America. He afterwards rode with Colonel Barré and Mr. Townshend to see my Lord Bessborough's villa at Roehampton.

January 14th - Lord Dunmore breakfasted here, and went afterwards with Lord Shelburne to the new house in Berkeley Square, and from thence to the House of Lords, the Parliament meeting to-day. Lady Louisa Manners came to us, and Mr. Ehret to me, with whom I begun the Chinese plants that blew at Bowood this summer. Mr. Sulivan, Lady Louisa, and I dined alone, the House of Lords sitting late, and Lord Shelburne going after-wards to the House of Commons, where Mr. Pitt spoke on the repeal of the Stamp Act in America. The Duchess of Bolton, Miss Finches, and Miss Lowther, drank tea here, and Lady Louisa and I were gone to our rooms just as Lord Shelburne returned from Boodle's, where he supped.

---

Here are some notes on people and places mentioned in the diary entries. You can click images for enlargement.

Thucydides' History of the Peloponnesian War -
Sophie writes: "We were particularly struck with his funeral oration to the surviving friends of the Athenians killed in the first war."
          This is the oration by Pericles. It's given in full on a World Civ page at Washington State University. The site says:

At the end of the first year of war, the Athenians held, as was their custom, an elaborate funeral for all those killed in the war. The funeral oration over these dead was delivered by the brilliant and charismatic politician and general, Pericles, who perished a little bit later in the horrifying plague that decimated Athens the next year. The Funeral Oration is the classic statement of Athenian ideology, containing practically in full the patriotic sentiment felt by most Athenians.

Thucydides has Pericles say: "I have dwelt upon the greatness of Athens because I want to show you that we are contending for a higher prize than those who enjoy none of these privileges, and to establish by manifest proof the merit of these men whom I am now commemorating." And: "Make them your examples, and, esteeming courage to be freedom and freedom to be happiness, do not weigh too nicely the perils of war."
          England was at war on and off throughout the eighteenth century. At this time there was peace, but this was the time of the Stamp Act and conflict with the American colonies was abrewing. The references to freedom and happiness were somewhat prophetic. At this time, Sophie's husband, Shelburne, opposed the punitive acts of King George III and the Grenville government against the American colonists; he later opposed the British war policies when the rebellion began; and, still later, as peace negotiator, he tried to re-establish relations with the Americans while trying also to support the rights of American loyalists.

sermon of Abernethy's -
John Abernethy (1680–1740) was, like Shelburne, an Irish Protestant. He held that religious belief should be founded on reason and free choice, not the authority of church fathers or the appeal to emotions whether of exaltation or fear. He believed in tolerance for believers of all sects and supported campaigns to remove political and religious restrictions that had been imposed on dissenters.

Mr. Townshend. This was probably James Townshend, a political ally and friend of Shelburne's. He is described in the memoirs of the Earl of Albermarle:

The father, Chauncy Townshend, had all his life been devoted to the Court. The son, a man of independent fortune, ardent temperament and undaunted resolution, had embraced with much fervour the [radical, and thus anti-Court] cause of Wilkes. He was at this time member of West Looe [in Cornwall], was a friend and follower of Lord Shelburne, at whose house, in Berkeley Square, he was generally a guest during his stay in town. Although he was not a man of education, he possessed considerable talents and spoke in Parliament with much natural eloquence. "He was," says Beloe, "a firm and steadfast friend, and so tenacious of his promise, that he would leave the remotest part of the kingdom, and the most delightful society, to attend and give his vote at Guildhall though for the meanest individual and the humblest office. He was proud and tenacious of his dignity among the great, and of the most conciliatory affability with his inferiors. He would travel from one end of the kingdom to the other, with a small change of linen behind his saddle.

Memoirs of the Marquis of Rockingham and his contemporaries : with original letters and documents now first published by George Thomas, earl of Ablemarle, by George Thomas Keppel, Earl of Albemarle, London : Bentley, 1852, p. 95.

Mr. Dunning -
John Dunning, a member of the House of Commons, aligned himself with Shelburne and spoke there in favor of policies, such as repeal of the Stamp Act, which they both advocated. He would later become Baron Ashburton.

Lady Louisa Fermor -
It's typical of Sophie to write of her aunt using full name and rank. It doesn't seem to have been unusual, however, for many letter writers of the period do the same. Lady Louisa was one of Sophie's aunts. She stayed with Sophia quite frequently and often appears in the diary. Lady Louisa's connection to Princess Amelia was via Lady Charlotte Finch, the royal governess.

Mr. Greville -
Sophie may mean George Grenville (1712-1770), the previous prime minister, recently replaced by Rockingham. It was his government that introduced the Stamp Act to raise revenue. The names Grenville and Greville were associated: George Grenville's son became first Lord Greville.
          An alternative possibility: Charles Greville Montagu (1741-1783), elected to the House of Commons later that year and then sent to South Carolina as colonial governor. During the American Revolution he raised 400 troops among American prisoners of war to fight the Spanish. He was himself accused of refusing to fight Americans and he carried out a promise to the American prisoners that they would not fight their fellow countrymen. He and many of them settled in Nova Scotia after the war.

Lady Waldegrave -
Probably one of the three daughters of James Waldegrave, 2nd Earl of Waldegrave and Maria Walpole. Their names were Lady Elizabeth, Lady Charlotte, and Lady Anne.

Duke of Gloucester -
This was Prince William Henry, a son of the Prince of Wales and step-brother to the Waldegrave sisters.

Le Siècle d'Alexandre: not identified

Colonel Barré -
Isaac Barré was a political associate of Shelburne's, he was known for his eloquent speeches in the House of Commons. The previous year, he and Townshend spoke on opposite sides during debate on the Stamp Act. Townshend called the American colonists "children planted by our care, nourished up by our Indulgence until they are grown to a degree of strength and opulence" and said they should be happy to pay a tax to support the home government ("to contribute their mite to relieve us from heavy weight of the burden which we lie under"). In response, Barré said "They planted by your care? No! Your oppression planted ‘em in America. They fled from your tyranny to a then uncultivated and unhospitable country where, ... actuated by principles of true English liberty, they met all these hardships with pleasure, compared with those they suffered in their own country, from the hands of those who should have been their friends. ... [T]hat same spirit of freedom which actuated that people at first, will accompany them still. ... The people I believe are as truly loyal as any subjects the king has, but a people jealous of their liberties and who will vindicate them if ever they should be violated; but the subject is too delicate and I will say no more." The National Portrait Gallery has a portrait of Shelburne and Barré together.

Mr. Fitzmaurice
This was Shelburne's brother, Thomas FitzMaurice (1742-1793).

Lady Mary Hume -
This may be the wife of John Hume, Bishop of Salisbury,

Northumberland House -
London residence of the Percy family, who were at this time the Earls of Northumberland. Its interiors were designed by Robert Adam.

Miss Emily Hervey, Mr. Cope, brother to Mrs. Walker: not identified

Lady Charlotte Finch -
As noted above, Lady Charlotte Finch, Sophie's aunt, was governess to the children of King George III. Her skills as an educator were highly regarded; there is a good article on her in the Dictionary of National Biography.


Dr. Leigh, an American, and Mr. Taylor, MP: not identified


Mr. Brown -
Lancelot (Capability) Brown was the best-known landscape architect of his time.

Governor Vansittart -
This is probably Henry Vansittart of India. He was governor of Fort William in Bengal during the five years preceding this diary entry.

Mr. Sulivan and Captain Howe: not identified

Lady Juliana Penn -
Sophia Margaret Juliana Penn was the daughter of Thomas Penn and grand-daughter of William Penn of Pennsylvania. She married a son of the famous author, Lady Mary Wortley-Montagu. She died in April 1847.

Lady Anne Dawson -
One of Sophie's aunts. See the first of my diary blog posts for a story about her.

my Lord Bessborough's villa at Roehampton -
The villa of Lord Bessborough at Roehampton was designed by Sir William Chambers who had become famous for the work he did at Kew Gardens for the princess of Wales.

new house at Berkeley Square -
At the time Sophie wrote, Shelburne was building a mansion in London on that square.

Lady Louisa Manners -
The Frick Gallery says Lady Louisa Manners was sister of the Earl of Dysart. The same age as Sophie, she married John Manners of Grantham in 1765. The portrait at right -- from the Frick -- is of Lady Louisa Manners.



Duchess of Bolton -
Half a year before Sophie wrote this diary entry Katherine Lowther became the Duchess of Bolton by marrying Admiral Harry Powlett, the 6th Duke.

The Miss Finches were related to Sophie's mother, hence cousins, I think.

Boodle's -
Boodles on St. James' in London began as a coffee house in 1762 and was known as a political club.

when Google is not your friend

I've been watching blog-traffic on Google's threat to our privacy. Like Nick, I want to enjoy the vast potential for connecting with others that the internet provides.

{Today's Google logo celebrates the opening of the Winter Olympics}

An example, I signed up for LibraryThing at the beginning and have participated in some of the many opportunities for opening new dialogs that it provides. Other LT users have contacted my about my LT persona and my catalog of books. I've contributed to the bountiful discussions of LT's Google Group. I've observed the interconnectedness of my library with others'. I've written reviews, comments, and notes on my catalog entries and read those of others. These activities don't just bring me a bit of diversion; this kind of making contact enriches my life.

There's much more of this kind of thing that I could do but don't. I stand aloof partly because there's only so much time and partly because, as the Miranda declaration says, what I say can and will be used against me. I used to think what could possibly happen; I haven't done anything wrong and anyway my real name and personal details don't appear anywhere in my exchanges via the net.

I still largely think that's true: I'm innocent and thus not of any interest to the law enforcement community and I've protected my identity to protect me against people who would do me harm. So what's to prevent me from plunging in and fully exploiting all the interaction that's available to me?

However .... I'm also painfully aware that innocent behavior can be made to appear to be criminal (or at least compromised; or perhaps associated with the possible criminal behavior of others). And also that my personal details can be pieced together without my control. To take an obvious case, the state makes available information about my ownership of real property. In fact there are lots of governmental and corporate databases that have lots of details about me. They're mostly (but not all) restricted from making the information available (e.g., my bank can't share information about me; the exceptions are such things as the real estate example).

But these restrictions are not air-tight (the Patriot Act, actions of the NFC, and other reports of government snooping show that this is so). And many databases are not adequately protected against intruders (as the theft of credit card info shows -- see addendum at bottom for a couple of other examples).

And there are things we don't know about the future. Ten years ago many, many of us treated the Web as a safe haven -- and then it was. How many of us thought then about what might develop later, as has now occured? And if we recognized the threat, did we fully understand that so much of our Web experience would persist, data storage costs becoming so cheap that the trivial conversations on Usenet groups in the '90s would be preserved and fully searchable in '06?

At least in China Web users know where they stand: step out of line and you'll end up in jail. I can't imagine totalitarian control to such an extent in the US, but there are lots of things that will come about that I cannot now imagine. Something like that could occur here, may be occuring now.

All this is preamble to an article on one piece of the privacy-risk puzzle: What vulnerability results from our use of Google and the other search engines? What use can be made of the databases containing search histories that Google and the other search engines maintain?

The article is by Danny Sullivan on SearchEngineWatch, and it's a good one. Here are some extracts:

Which Search Engines Log IP Addresses & Cookies -- And Why Care?

extracts:

Last week I wrote how John Battelle followed up with Google to find out if they can link search data to IP addresses or cookies. Google said yes. I wrote that wasn't surprising. I covered back in 2003 how this is standard information any web server is likely to log, including servers at the major search engines. I also wrote last week that if Google is doing this, it was fair to assume all the major search engines are.

Rather than assume, News.com did an actual survey of this. Verbatim: Search firms surveyed on privacy has the rundown of AOL, Google, MSN and Yahoo (Ask Jeeves unfortunately was not included). Yes, they all log this information. AOL says they don't in one instance, but I'll debunk that later.

First, let's go back to the bigger question of why suddenly people are asking about IP addresses and cookies.

Every time you go to a web site, you leave behind an IP address. This is like your internet telephone number, and it's possible (especially with the help of your ISP) to trace activity back to you. That 2003 article of mine, Search Privacy At Google & Other Search Engines, explains this in more detail.

Often, a web site will also assign you a cookie. This is simply a way for your browser to communicate to the web site that you've been there before (not you personally -- such as your name and address -- but you as in a particular web browser software like Internet Explorer or Firefox).

Cookies are better than IP addresses for tracking purposes, because your IP address will often change from internet surfing session to session. Your cookie stays the same, as long as you use the same browser on the same computer and don't delete it.

John's reader wanted to know if search queries at Google could be linked to an IP address or a cookie. Huh? What? Why care?

OK, let's say the government of BigBrother wants to know how many people are looking for something illegal, such as Widagra. Let's say Widagra is a drug legal in some countries but which BigBrother deems evil. If you are even remotely interested in this drug, BigBrother considers you a bad, bad person.

BigBrother wants to know all the people who might be looking for this drug via search engines, assuming that will lead them to the evildoers. So it tells the search engines to hand over a list of all IP addresses that are shown to have done a search for Widagra. [It mines these IP addresses and then goes back to the ISP for lists of cookies which record a unique browser identifier. Cookies and IP addresses together lead them to the computer you used.]

Why's that useful? Back to BigBrother, say they scan the list of those searching for "widagra" and decide they'd like to profile individuals on that list further. They could ask to see all the searches done from a particular IP address. [And they] see that the cookied browser of "e43UBsS4fNZzmDgj" looked for "widagria," so they order up a list of all terms that browser did. They get back:

• widagra
• movement to overthrow BigBrother web site
• widagra freedom campaign
• how can we stop evil widagra users
• i love president bigbrother
• email valentine's day cards
  ...and so on

Some of those searches might help BigBrother decide this particular person is an evildoer. But then again, maybe not. Maybe they were researching the evils of widagra. Maybe the browser software was in a library, where different people used it.

[Danny Sullivan's article doesn't mention it, but where authorities want to know what happened on public computers in a library, they descend on the library and carry off the computers. Under the Patriot Act they can do this in secrecy; no one in the library can talk about it. With a court-ordered supoena they can, in the regular course of law enforcement work, do the same. This UPI account describes a recent incident in a public library where this occured, extracts below.]

How long do each of the search engines keep [data on searches]?

• AOL: Personal search histories expire after 30 days, and backups are not kept. How long log data (IP, cookied info) is maintained is not covered.
   
• Google: No particular period for anything is given, which I read as nothing being destroyed.
   
• MSN: Data is deleted, but not specifics are provided
   
• Yahoo: No particular period for anything is given, which I read as nothing being destroyed.

MSN's deleting some, but I suspect log data is backed up and kept somewhere with no destruction policy in place. Same too, for AOL.

[Have] any of the companies handed over search data? Responses:

• AOL: No comment
   
• Google: No comment (Gmail requests have been received)
   
• MSN: It has never had any criminal or civil requests for search history data
   
• Yahoo: No comment

See further:

FAQ: When Google is not your friend from News.com

More on search privacy issues from us, see these articles:

• Protecting Your Search Privacy: A Flowchart To Tracks You Leave Behind
• Private Searches Versus Personally Identifiable Searches
• Search Privacy At Google & Other Search Engines
• Google And The Big Brother Nomination

For more on the entire current fight between Google and the Department Of Justice, see these articles:

• Bush Administration Demands Search Data; Google Says No, Yahoo & MSN Said Yes
• Court Documents & Summary Of United States Versus Google Over Search Data
• The Day After: Points In The Search Trust Sweepstakes
• Privacy Groups, Government Officials Comment on Privacy and Web Search from Reuters
• FAQ: What does the Google subpoena mean? from News.com
• Judge Sets Hearing Date in Google Subpoena Case
• How The US Department Of Justice May Analyze Search Data & Freedom Of Information Act Request For Disclosure

Here are extracts from the UPI account of computers seized from a public library:

UPI Intelligence Watch By JOHN C.K. DALY UPI International Correspondent WASHINGTON, Feb. 2 (UPI)

extracts:

Librarians in Newton, Mass., fended off FBI demands for 30 of their computers, as they did not produce a search warrant. The FBI attempt to acquire the computers followed an unspecified Jan. 18 e-mail threat to Brandeis University, which led to the evacuation of more than a dozen buildings on the campus.

The FBI subsequently determined that the threat came from a Newton public library computer and attempted to seize 30 library computers without a warrant. Newton library director Kathy Glick-Weil told the FBI agents they could not take the computers unless they had a warrant first, and Newton mayor David Cohen supported Ms. Glick-Weil.

Following the rebuff, the FBI obtained a judicial warrant [and] with their warrant, ... took possession of the three computers.

===========

Addendum:

The blog, TVCAlert, gives a couple of examples of how things can go wrong. In the first, our medical records could be made available to people who wish to use them against our interests (the obvious case: being denied a job because of medical history). In the second, government databases can be compromised through bribery of officials.

Gambling with Your Medical History

(6 Feb) A Consumer Reports investigation of electronic medical records raises concerns about keeping the information out of public view.

"Advocates of Electronic Health Records say the system will have the tightest possible security. But recent large-scale thefts of credit card and banking information have shown that all databases, even those with state-of-the-art security protections, can be compromised. Electronic medical records systems now in operation have already sprung some serious security leaks.... The full report on electronic medical records appears in the March 2006 issue of Consumer Reports which goes on sale February 7, 2006 wherever magazines are sold."

SEE: The new threat to your medical privacy Consumer Reports, March 2006 (Available by paid subscription. "A national system of electronic medical records could easily save your life. And it could also jeopardize the security of your personal health information.") PI Indicted for Obtaining Private Records

(6 Feb) Private investigator Anthony Pellicano, whose clients include celebrities and high-profile lawyers, "pleaded not guilty Monday to racketeering charges alleging he paid police officers and others to get into confidential records and provide him with information."

the Greenspan legacy

I've wondered from time to time how it has been possible to keep US interest rates low over the past few years. In particular, I expected that rates would have to rise to attract the foreigners who fund so much of our national debt. Why has it turned out that foreigners wanted to fund our debt despite the low rates? Partly I think they have done so because the US economy has been stronger than other industrial economies and, basically, because they have been satisfied with low but safe returns over high but risky ones. Why has the economy been strong? Shouldn't it have stumbled by now (pressed by war expenditures, hurricane damage, high oil prices and the like)? Shouldn't low interest rates have caused businesses to over expand?

High productivity is surely one reason for sustained growth. Consumer spending is surely another.

And why? There's a clue in one of the "Greenspan Legacy" articles, one from the Washington Post that appeared late last month. It says in part that low interest rates kept the economy going, smoothed over difficulties like Iraq, Katrina, and $50 expenditures at the gas pump, and encouraged Americans to buy, buy, buy. At the same time low interest rates did not stimulate over investment in production and inventories, as often happens, nor did companies hire lots of new employees. Instead they kept trimming payrolls, abandoning marginal products, and taking advantage of automation. Here are some extracts from the article: :

The Greenspan Fed lowered its benchmark rate another 12 times ... as the economy struggled to regain its footing, cutting the rate to 1 percent by June 2003, the lowest level since 1959.

The Fed's rate cuts had little effect on corporate America, which had overinvested in equipment, software and factories during the late 1990s boom; businesses retrenched, slashing both payrolls and spending plans, tipping the economy into recession from March through November of 2001.

But low interest rates worked like an intoxicant on consumers, who snapped up new cars and trucks with no-interest loans and seized on low mortgage rates to buy new homes and refinance old home loans. Those sales and refinancings freed up more cash to spend. Households used much of that extra money to pay off credit cards, student loans and other, higher-interest rate debt -- "cleaning up their balance sheets," in economists' terms. They also kept shopping through the recession, the terrorist attacks and the rocky economic recovery that followed.

The tonic worked. Household spending rose in 2001, 2002, and 2004, even as the wealth and income of the typical household fell or remained flat in the same period, according to an analysis by Moody's Economy.com. The recession was one of the mildest on record. The economy has been growing since November 2001 and was strong enough by mid-2004 for the Fed to start raising the benchmark rate.

Fed officials expected then that longer-term rates, such as mortgages, would rise as well, causing consumers to borrow less and save more.

But it didn't work out that way. For several reasons -- low inflation, economic stability and foreign investors pouring their savings into U.S. stocks, bonds and other assets -- long-term interest rates fell for a year after the Fed started raising the benchmark rate and have stayed relatively low.

Mortgage rates also fell, prompting homeowners to refinance repeatedly. Changes in the financial industry made it easier for homeowners to tap their home equity through refinancing. Lenders provided adjustable-rate mortgages that enabled home buyers to pay higher prices while temporarily making low monthly loan payments.

The housing market kept booming. Consumer debt and spending kept climbing.

Can the US sustain economic growth that is fueled by a consumer binge that itself is fueled by low interest rates? Absolutely not. No one believes that's true. The question that matters more is: Will the US economy make a graceful transition to a more stable basis for growth? And the answer: No one knows. What's certain is that the US cannot act alone. Its economic future is intimately intertwined with those of the other major economies of the world, not just those of the industrial nations, but the emerging nations and the oil-producing nations as well.

As the managing director of the IMF recently put it, the US situation is one element in a world-wide problem of economic imbalace. Governments in many nations need to take responsibility for addressing these global imbalances. He said: "This [acceptance of collective responsibility for action] will make the necessary actions both politically easier and economically more effective. Politically easier, because instead of finger-pointing and recriminations you get mutual support and burden sharing. Economically more effective, because as demand is withdrawn in the United States it is added in Europe and Asia, and as financial flows from Asia become less available, so they become less necessary in the United States. To quote Ben Franklin, at the signing of the Declaration of Independence, this is a case where we must all hang together, or assuredly we shall all hang separately."

Here are some further points in that IMF speech:

Shared Responsibilities: Solving the Problem of Global Imbalances
Speech by Rodrigo de Rato
Managing Director, International Monetary Fund
At the University of California at Berkeley
Berkeley, California
February 3, 2006

extracts:

United States savings are too low [and] the fiscal deficit remains high.

In emerging Asia on the other hand, savings are relatively high, but in recent years most countries in emerging Asia have suffered an investment drought.

For years there have been expectations that U.S. consumption would fall—following the bursting of the stock market bubble in 2000, for example—but it has proven to be remarkably resilient.

Foreign investors and central banks seem to have an undiminished appetite for U.S. dollars. Why should they not simply continue to finance U.S. consumption?

There are two obvious ways in which global imbalances could unwind quickly, and in a very disruptive way. One would be an abrupt fall in the rate of consumption growth in the United States, which has been holding up the world economy. U.S. consumption growth has to slow because the negative household savings rate is unsustainable, and it will slow, perhaps on the back of slowing house price growth. But if it slows abruptly, it will take away a major support from world demand before other supports are in place. Such a fall could also reduce domestic demand in other economies, for example in Europe and China, because demand for their exports falls. In this scenario, there would be a contraction of global demand, with only moderate correction of current account imbalances.

[Another possibility:] Investors [will] become unwilling to hold increasing amounts of U.S. financial assets, and demand higher interest rates and a depreciation of the U.S. dollar, which in turn forces U.S. domestic demand to contract.

The key challenge then is to unwind global imbalances gradually.

It is particularly important, and increasingly urgent, that the United States tackle its current account deficit by increasing domestic saving. Reducing the fiscal deficit has an important role to play in this. The U.S. administration recognizes the need for deficit reduction, but its plans are focused almost entirely on proposals for unprecedented cuts in spending. These would have been difficult to achieve even before Hurricane Katrina. Uncertainties about the costs of operations in Iraq and Afghanistan and the reconstruction of the Gulf Coast, and the difficulty of curbing entitlement spending, cast further doubt on the realism of the current deficit reduction plan. Meanwhile, on the revenue side, the administration seems to fear that the benefits of any revenue raising measure will be lost, as it is used as an excuse for more spending. This should not be the case, and it need not be the case. The administration and the Congress themselves control both taxes and spending, and action on both is needed to reduce the deficit. With this in mind, I hope that policy makers will give more consideration than they have so far to an energy tax, and also to the measures suggested by the President's Advisory Panel on Federal Tax Reform. In particular, the panel's report contains welcome suggestions on shifting the tax burden from saving toward consumption, which could improve the efficiency of the system, and on how to streamline and simplify the tax code. It is also critically important to reform entitlements, and to address the problems of social security and Medicare.

have you ever seen a coracle?

I found this while doing the post on Baidarka -- irresistible.



The source: Vintage Skinboats

For more information on coracles, I suggest you start with the Wikipedia entry.

without comment

Take a look at the homeland security cartoons in Slate:

Sargent
Mike Luckovich
Duane Powell
Signe Wilkinson

Diary of Lady Shelburne - 2nd Post, an evening with David Hume

Here's a second extract from the diary of Lady Shelburne.

It's kind of pleasing to find that the lady is a mystery. Most of what little I know of her is from the diary, and since she says almost nothing of herself there, I have to infer that little.

This diary entry Boswell-like reports dinner-table conversation. As you'll see, it's excellent story telling. She was 21 years old and two years married when she wrote it. I've included some context below the entry.

February 28th, 1766. Lord Dunmore, Mr. Hume, the author [i.e., David Hume], and Mr. Cambridge [a poet] dined here. Mr Hume was Secretary to Lord Hertford's Embassy at Paris, when he was received with an uncommon openness, on account of his reputation as an author, and the esteem the English were in then since the peace. His company was universally courted, and he was the first person that got admission to the Scotch College to see seven volumes of King James the Second's writing there, which he had left to that Society at his death, together with all his correspondents' letters from England, and his heart to be deposited there. The books were all wrote in his own hand and contained an account of most part of his life. The papers he was not permitted to see, Father Gordon alleging that they contained letters from many people in England to the time of his death, who never had been suspected and might suffer by their names being known.

It appears from these books that soon after the triple alliance in 1667, Charles II. concluded a Treaty with Louis XIV. with a view to establish the Roman Catholic religion in England and stipulating for the conquest and subsequent division of the Dutch territory. The only difficulty after this Treaty was which object should first take place. The Duchess of Portsmouth upon this came to England and gaining her point war broke out soon after. The King says in these memoirs that brother, Charles II. was so bigoted that in the little Council where the Treaty was settled, he cryed for joy at the prospect of bringing in the Roman Catholic religion in England. It was signed by the Lord Arundel of Wardour at Paris on the part of the King. There were likewise several sheets of advice to his son. In them he takes his resolution for granted and advises him of all things to beware of women; he says that very far in life he was seduced by the allurement of the sex and repeats to him again and again to beware of such cattle. He desires him to make it his first and immediate object to get that pernicious Act, the habeas corpus, repealed and that for the good at the subject. For if that was done the prerogative would be strengthened, standing armies rendered unnecessary, and Government easier executed and less burthensome. He attributed most of his difficulties to his father-in-law, Lord Clarendon, not taking advantage enough of the times to gain more points in favour of prerogative.

Mr. Hume also said the Young Pretender was in England in the year 1753 that he walked all about London and went into Lady Primrose's, when she had a good deal of company. She was so confounded that she had scarce presence of mind to recover herself enough to call him by the fictitious name he had given her servant. When he went away her servant told her that he was prodigious like the Prince's picture that hung over the chimney. He afterwards abjured the Roman Catholic Religion in a church in the Strand, under the name even of Charles Stuart. He was at different times greatly connected with the first people of reputation in Europe, among others with M. Montesquieu. M. Helvetius did all his business for him from about the year 1750 to 1753, and was intrusted with all his secrets, and told Mr. Hume it was surprising even then how many people kept up correspondence with him from England. These people took great pains in removing prejudices from his character, but it at last ended in his having no religion at all, and by degrees he was given up by them and almost everybody who knew anything of his personal character, on account of the meanness and iniquity of it in every respect. He appears to have but one good quality or rather resolution, which was never to marry, though he has been often pressed to it, particularly by the French Court. He always said he had met with too many misfortunes to wish to contribute to anybody's suffering the like, and was so particular on the subject that he had a daughter by Mrs. Walkinshaw, which he took particular care should be christened at Liége, and then publicly declared to be his natural daughter. The French however made a point of getting her from him, though he parted with her with great regret and difficulty. They have taken care of her, and educated her in a convent in France.

Here's some context on people and events Sophie mentions in this entry:

Lord Dunmore was a Scottish peer who was later to be Governor of New York and then, just before the American Revolution, of Virginia. He fought in the war and is noted for freeing slaves -- the first mass emancipation in North America (he offered freedom to enslaved Africans who joined his Army). He was in his early 30's when the dinner took place. This portrait (from the Tate Gallery) by Joshua Reynolds was made the year before.

I'm sure David Hume is known to all. He was highly regarded as a historian during his own time, and a philosopher in succeeding ones.

The reference to Hume as secretary to Lord Hertford's Embassy at Paris concerns the Treaty of Paris which ended the Seven Years' War In 1763 Lord Hertford represented Britain in Paris with Hume as his secretary and when Hertford left in 1765 Hume stayed on as Chargé d'affaires. One source confirms what Sophie says about Hume's reception by the French: "Though 'entirely unmoved by the raptures of Paris,' Hume moved in the highest of circles. 'In the gay and fashionable circles of Paris his fame, station, and agreeable bearing, secured him so hearty a welcome that ladies and princes, wits and philosophers, vied in their attentions.'"

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In 1766, at the time Sophie wrote this diary entry, Hume was an Under-Secretary of State in the Home Office under Lord Hertford's brother who was Secretary of State.

I haven't been able to identify the poet Mr. Cambridge.

The Triple Alliance of England, Sweden, and the Dutch republic aimed to stop the aggressions of Louis XIV. The treaty between Charles II and Louis XIV to which Sophie refers was the Treaty of Dover. About it one source says:

In 1670 Charles II and Louis XIV signed the Treaty of Dover. In the treaty Louis XIV agreed to give Charles a yearly pension. A further sum of money would be paid once Charles announced to the English people that he had joined the Catholic church. Louis XIV also promised to send Charles 6,000 French soldiers if the English people rebelled against him. For his part, Charles agreed to help the French against the Dutch. He also promised to do what he could to stop the English Protestants from persecuting Catholics.

This treaty was kept secret from the English people while Charles tried to persuade Parliament to become more friendly towards the French government. Charles used some of the money to bribe certain members of Parliament. These MPs, who supported Charles' pro-Catholic policies, became known as Tories by their opponents in Parliament.

The Dutchess of Portsmouth was a French aristocrat who became the mistress of Charles II at about the time of the treaty leading to speculation that she was sent to lure Charles into alliance with Louis. The Wikipedia article on her says she "concealed great cleverness and a strong will under an appearance of languor and a rather childish beauty." It also says the French government rewarded her handsomely and the English roundly hated her:

The hatred openly avowed for her in England was due as much to her own activity in the interest of France as to her notorious rapacity. Nell Gwynne, another of Charles's mistresses, called her "Squintabella", and when mistaken for her, replied, "Pray good people be civil, I am the Protestant whore."

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An anonymous pamphlet exposed the secret treaty a few years later and Ralph Montagu had his career at Court end dramatically in 1678 when he revealed its existence to the House of Commons.

Wikipedia gives some background on habeas corpus in connection with Kings Charles II and James II.

The "sheets of advice to his son" can be found in Selections from the Instructions of King James II and VII to his Son. As you can see from this extract, Hume remembered well what he read and Sophie what she heard. It's the section of the advice (in one enormous paragraph) warning of the treachery of mistresses ("beware of such cattle"):

What you ought to arm yourself most against are the sins of the flesh, princes and great men being more exposed to those temptations than others, especially if they enjoy peace and quiet. This vice carries its sting with it, as well as all others, and with more variety it has that which is common with the others, which is that one is never satisfied, and no sooner has one obtained one object, but that very often at the expense of one's health, estate, nay honour and reputation, one desires change, and exposes himself again to all the former inconveniences. Those [women] of the greatest quality are not excepted, for if they once let themselves go, and give themselves up to these unlawful and dangerous affections, they are more exposed to the censure of the world than others of a lower sphere ... and I never knew or heard of but one who did not one way or other deceive their gallant ... all the world knows how most of those fine ladies have behaved themselves, not only after their gallants had quitted them for others, but while their greatest favour lasted, by having intrigues with others and giving with one hand to their true inclination, what they got from their abused great man, who was the only person who did not perceive how he was abused, and if they did, were so bewitched and imposed on by their fair ladies, as not to break quite with them, nor use them as they deserved. Would but kings, princes and great men consider and take warning of these kind of dangerous women, they would sooner take a viper into their bosom, than one of these false and flattering creatures; ancient histories are full of dismal relations of what have happened to kings, great men, and whole nations, on the account of women; wars, desolation of countries, besides private murders and blood-shed as well as ruin of private families which latter we in our days have seen happen but too often. [N]o galley-slave is half so miserable as those bewitched men are, for they know what they have to trust to, that they cannot be worse than they are, and have some rest and quiet; but these have none at all, being exposed to all the inconveniences which flow from their own jealousy. ... I cannot forbear giving one instance, for when at a club of some of the mutinous and antimonarchical Lords and Commons, it was proposed by some to fall upon the mistresses, the Lord Mordant the father, said, By no means, let us rather erect statues for them, for were it not for them the King would not run into debt and then would have no need of us. ... [H]ad not the king your uncle [Charles II] had that weakness which crept in him insensibly and by degrees, he had been in all appearance a great and happy king, and had done great things for the glory of God and the good of his subjects; for he had courage, judgment, wit, and all qualities fit for a king. ... And to let you see how little real pleasure and satisfaction anyone has that lets themselves go to unlawful pleasures, I do assure you, that the king my brother was never two days together without having some sensible chagrin and displeasure, and, I say it knowingly, never without uneasiness occasioned by those women. It is not proper for his and their sakes to enter into particulars, or else I would do it exactly ... Beware of such kind of cattle; they never consider but themselves; do not believe them, let them say never so much to the contrary. Can one be so weak as to believe that they that have laid all conscience and shame aside, will be true to any, but will be carried away by inclination or interest. I speak but too knowingly in these matters, having had the misfortune to have been led away and blinded by such unlawful pleasures, for which I ask from the bottom of my soul God Almighty pardon.

The listeners around the table would have known that Lord Clarendon did not support James II in his last days, but rather joined with William III and Mary in the Glorious Revolution of 1688 when James fled England and was deposed.

The Young Pretender, Bonnie Prince Charlie, was the grandson of James II.

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Throughout the first half of the 18th century there were threats of invasion to reinstate the Stuart dynasty. The attempt in 1745 was the most famous of these. Lord Fitzmaurice, the author of the biography in which Sophie's diary appears quotes a letter about Charlie's clandestine visit to England in 1753:

Earl of Albemarle to Sir T. Robinson, August 21st, 1753. "It has been positively asserted to me by a person of some note, who is strongly attached to him, but dissatisfied with his conduct, that he, the Pretender's son, had actually been to England in great disguise as may be imagined, no longer ago than about three months; that he did not know how far he had gone, nor how long he had been there, but that he had staid till the time above mentioned, when word was brought him at Nottingham by one of his friends, that there was reason to apprehend that he was discovered or in the greatest danger of being so, and that he ought therefore to lose no time in leaving England, which he accordingly did directly. The person from whom I have this is as likely to have been informed of it as anybody of the party, and could have no particular reason to have imposed such a story upon me, which could serve no purpose." (Lansdowne House MSS. )

Mrs. Walkinshaw was a young daughter of an aristocratic supporter of the Young Pretender. Will Springer says he took her as his mistress during the Jacobite rebellion of 1745 at a time when he was losing interest in the fight. The daughter that the diary mentions was Charlotte, Duchess of Albany. The Wikipedia article on her says that Mrs. Walkinshaw and Charlie separated with allegations that he abused her and it confirms that he treated his daughter well, even making her his personal heir.

Here is a citation for the biography in which extracts from Lady Shelburne's diary appear:

Author: Fitzmaurice, Edmond George Petty-Fitzmaurice, 1st
baron, 1846- [from old catalog]
Title: Life of William, earl of Shelburne, afterwards
first marquess of Lansdowne,
Edition: (2d and rev. ed.) ...
Published: London, Macmillan and co., limited., 1912.
Description: 2 v. fronts. (ports.) plates, maps (1 fold.) 23
cm.
LC Call No.: DA512.L3F5 1912

To find this book in a library, click here.

Here's a link to the first post on Lady Shelburne's diary.

a question

A question, yes, but first a story. I quote:

The following is an actual question given on a University of Washington Thermodynamics mid term exam. The answer by one student was "so profound" that the professor shared it with colleagues, via the Internet, which is, of course, why we now have the pleasure of enjoying it as well.

Bonus Question: Is Hell exothermic (gives off heat) or endothermic (absorbs heat)? Support your answer with a proof.

Most of the students wrote proofs of their beliefs using Boyle's Law, (gas cools when it expands, and heats when compressed). One student, however, wrote the following:

First, we postulate that if souls exist, then they must have mass. Next, we need to know how the mass of Hell is changing as a function of time. To get that answer, we must know the rate at which souls are moving into Hell and the rate at which they are leaving. I think that we can safely assume that once a soul gets into Hell, it will not leave. Therefore, no souls are leaving.

As for how many souls are entering Hell, let's look at the different religions that exist in the world today. Some of these religions state that if you are not a member of their religion, you will go to Hell. Since there are more than one of these religions and since people do not belong to more than one religion, we can project that all souls go to Hell. With birth and death rates as they are, we can expect that the number of souls in Hell to increasing exponentially with time.

Now, we look at the rate of change of the volume in Hell because Boyle's
Law states that, in order for the temperature and pressure in Hell to stay the same, the volume of Hell has to expand proportionately to the number of souls added. This leads to two possibilities:

1. If Hell is expanding at a slower rate than the rate at which souls are entering Hell, then the temperature and pressure in Hell will increase until all Hell breaks loose.

2. If Hell is expanding at a rate faster than the rate at which souls are entering Hell, then the temperature and pressure will drop until Hell freezes over.

So which is it?

If we accept the postulate given to me by Lois during my Freshman year that: "It will be a cold day in Hell before I sleep with you," and take into account the fact that I still have not succeeded in having such meaningful relations with her, then #2 cannot be true, and thus I must conclude that Hell is exothermic and will not freeze.

The student received the only "A" given.

Is this true? You can find instances of the story presented as fact all over the web. But, I'm sure we all know that repetition of a tale does not make it true. Myself, I side with the urban legend reference pages which say it started as a contribution to a internet newgroup back in 1997. The author of the urban legends piece goes on:

The piece quoted above likely began as a humor post to the newsgroup rec.humor in 1997. Its roots, however, are far older: an unattributed parody of a scientific proof concluding Heaven was hotter than Hell appeared in a 1972 edition of Applied Optics, a story found in a 1962 book (reprinted from a 1960 magazine) is a mathematical "proof" that heaven is hotter than hell, and article published in a 1979 edition of the Journal of Irreproducible Results written by Dr. Tim Healey (written as a response to the Applied Optics piece) carried the joke one step farther by arguing that Hell was hotter still. Though these older pieces don't directly correlate with what has now become a standardized bit of Internet lore, the themes are similar enough for us to postulate that the older versions sparked the newer ones.

Interestingly enough, the purported student's opening gambit, "We postulate that if souls exist, then they must have some mass," stands in opposition to the position taken centuries ago by the Roman Catholic Church. The Holy See had given its official approval to a particular line of scientific thought, the vacuum, to specificially allow for immaterial forms such as weightless souls and armies of angels in what would otherwise be a filled universe. Without vacuums, places where measurable matter does not exist, both Heaven and Hell and all their denizens would have no place in the cosmic order of things. The time-honored Aristotelian assertion "Nature abhors a vacuum" had to be (and was) elbowed out of the way because the vacuum was a theological necessity.

Barbara "it also scares cats" Mikkelson

better in the spring

Julia gave me an Innocence Mission CD for Christmas. Here's a link to the Wikipedia entry for the group.

I'm fond of all the songs on the CD. Listening to it in the car last evening, driving back from Towson, having brought her some stuff and retrieved some as well, I was particularly struck by the lyrics to "One for sorrow, Two for joy."

Here's part:

Today is a winter sunday
we wear our heavy coats
the soul of my brother
is pure, though he does not think so

and everything is going to be much better in the spring

Though this winter has been a mild one, and though spring means pollen allergies for me, I fell in love with that prediction -- "everything is going to be much better in the spring" -- faith, optimisim, a fond wish, a grounding for hope....

I didn't know it then, but -- it turns out -- "one for sorrow, two for joy" is a crow counting rhyme. It goes:

One for sorrow,
Two for joy,
Three for a girl,
Four for a boy,
Five for silver,
Six for gold,
Seven for a secret
Never to be told.

That's meaningful for me because I've enjoyed the companionship of crows and mourned their departure. (Where did they go? Were they victims of the West Nile Virus?) I especially looked forward to crows that crowded a section of my morning commute through Rock Creek Park in the spring, spring that, for me, was better for their presence.

Here are some variants:

One crow sorrow,
Two crows joy,
Three crows a letter,
Four crows a boy.

One for sorrow
Two for mirth
Three for a wedding
Four for a birth
Five for silver
Six for gold
Seven of a secret not to be told
Eight for heaven
Nine for hell
And ten for the devil's own self.

One for sorrow
Two for mirth
Three for a wedding
Four for birth
Five for rich
Six for poor
Seven for a witch
I can tell you no more.

From SurLaLune fairy tale pages, discussion list

A note on crows and West Nile Virus. This is a good page on the birds and the threat: The Revered, Reviled Crow Clan.

An afterthought: Of the song, a reviewer says: “One for Sorrow, Two for Joy” laments a familial separation, the kind in which a lack of faith distances sister from brother. “Everything is going to be much better in the spring,” she assures her faltering sibling, and you wonder if she trying to encourage herself as well. Just as she does for us and for herself so frequently, she directs our attention to nature, to the signposts of God: “What is coming down from the north road / What is coming up from the ground?” In offering this song, she reminds us that the faithful bear the burdens of those who do not embrace the hope offered them.

source: The Innocence Mission, Befriended

baidarka

Baidarka - the Aleut kayak. It's gorgeous. The Engines of Our Ingenuity site has a page on them.

Says the page:

A small baidarka is light enough that a child can carry it. It'll capsize if you put it in the water without a passenger. It's a whalebone and driftwood frame covered with sealskin. You have to be a gymnast to get into one. But, once in, you can skim the water at 10 knots. You can land a seal -- even a whale.

Aleut navigators rode their baidarkas far out to sea -- to California, to the warm Pacific. Aleut legend tells how we know the earth is round. They once sent young men out in two baidarkas. They came back old, without ever having found any edge.

There are lots of web sites on how to build them. Here's one that has lots of photos.

These photos come from other sites:

a policy vaccuum

Consider this an update to my post on resolving global imbalances. I pointed there to articles in the Washington Post in preparation for the State of the Union speech. Here are two items post-mortem:

Steven Pearlstein is witty about the economic policy vaccuum in the US. He says:

We've known for the past several years that the Democrats have nothing original, credible or even mildly intellectually intriguing to say about trade and immigration, the health care crisis, the energy crisis, the income inequality crisis, the education crisis, the global warming crisis, the looming entitlement crisis and the ballooning federal budget deficit.

But now it's official: the Republicans have nothing original, credible or even mildly intellectually intriguing to say about them, either.

It's unanimous.

Read the whole article, it's short and pithy: Bush Echoes Presidents Past in Empty Talk of Economics, by Steven Pearlstein, Wednesday, February 1, 2006; Page D01

When you've read it, look at this one: Savings Rate at Lowest Level Since 1933. The author of the AP item says "Americans' personal savings rate dipped into negative territory in 2005, something that hasn't happened since the Great Depression. Consumers depleted their savings to finance the purchases of cars and other big-ticket items. ... Americans not only spent all of their after-tax income last year but had to dip into previous savings or increase borrowing. The savings rate has been negative for an entire year only twice before _ in 1932 and 1933 _ two years when the country was struggling to cope with the Great Depression, a time of massive business failures and job layoffs."

Rajan's vision of an America that consumes less and invests more (particularly in emerging-market countries) remains a pipe dream, no?

Lavinia Fenton, William Hogarth, and The Beggar's Opera

I found this while looking for something else.


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It's a portrait by William Hogarth of Lavinia Fenton, Duchess of Bolton, painted circa 1740-50, and it's in the Tate, London.

Here's the caption:

This is traditionally said to be a portrait of the actress and singer Lavinia Fenton (1708–60), who starred as the heroine Polly Peachum in the original and wildly successful 1728 production of The Beggar's Opera. After it closed, Miss Fenton left the stage to become the mistress of Charles Paulet, 3rd Duke of Bolton (1685–1754). In this role she is said to have been a delightful and accomplished companion, and a model of discretion. She bore the Duke three illegitimate sons, all of whom did well in the army, navy and the church. When the Duke's estranged wife died in 1751, the Duke married Lavinia and she became Duchess of Bolton. This portrait – if correctly identified – shows her in her matronly, riper years.

Here also is a link to the Wikipedia article on Beggar's Opera.

Rajan on resolving global imbalances

Perhaps you've been reading news reports lately dealing with the US economy in a ramp-up to the State of the Union Speech. See for example these three from the Washington Post: Savings Rate at Lowest Level Since 1933, Growth in 4th Quarter Reached a 3-Year Low, and Budget Office Expects Deficit to Edge Up.

US politicians seem to have an overly rosy view of the economy and its prospects. Not just the Bush administration, but I think some prominent Dems as well, are saying the US economy is strong enough and expanding well enough to support our current deficit and its expected continuance into the future.

That isn't how Raghuram Rajan, my favorite economist, sees the situation. He says, as he repeatedly has been saying, that the US is exposing itself to great risks in not dealing with the deficit. He recently gave a cogent summary of his arguments for resolving global imbalances:

Perspectives on Global Imbalances
Remarks by Raghuram Rajan, Economic Counsellor and Director of Research Department, the International Monetary Fund
At the Global Financial Imbalances Conference
London, United Kingdom
January 23, 2006

Charts

extracts:

Good morning. Since this will be the first session on global imbalances, I thought I would give you a broad overview. The picture is familiar to most of you. The United States is running a current account deficit approaching 6 1/4 percent of its GDP this year and over 1.5 percent of world GDP. And to finance it, the United States needs to pull in 70 percent of all global capital flows. While the deficit is still increasing, the location of the surplus countries is changing. The current account surpluses of the oil-exporting countries of the Middle East have now surpassed those of emerging Asia, which were already quite high.

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The current situation, I believe, has its roots in a series of crises over the last decade that were caused by excessive investment, such as the Japanese asset bubble, the crises in Emerging Asia and Latin America, and most recently, the IT bubble.

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Investment has fallen off sharply since, with only very cautious recovery.

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This is particularly true of emerging Asia and Japan.

The policy response to the slowdown in investment has differed across countries. In the industrial countries, accommodative policies such as expansionary budgets and low interest rates have led to consumption- or credit-fuelled growth, particularly in Anglo-Saxon countries.

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Government savings have fallen, especially in the U.S. and Japan, and household savings have virtually disappeared in some countries with housing booms.

By contrast, the crises were a wake-up call in a number of emerging market countries. Historically lax policies have been tightened, with some countries running primary fiscal surpluses for the first time, and most bringing down inflation through tight monetary policy.

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With corporations cautious about investing and governments prudent about expenditure—especially given the grandiose projects of the past—exports have led growth and savings have built up. Many emerging markets have run current account surpluses for the first time. In emerging Asia, a corollary has been to build up international reserves.

Some call this a new world order. I see the situation as a temporary but effective response to crisis. It is somewhat misleading to term this situation a "savings glut" for that would imply that countries running current account surpluses should reduce domestic incentives to save. But if the true problem is investment restraint, then a reduction in world savings incentives will engender excessively high real interest rates when the factors holding back investment dissipate. Put differently, I think it is best to see the underlying cause of current account surpluses as inadequate investment rather than excess savings, because the desirable policy response is to improve the investment environment rather than cut back on savings.

The world now needs two kinds of transitions. First, consumption has to give way smoothly to investment, as past excess capacity is worked off and as expansionary policies in industrial countries return to normal. Second, to reduce the current account imbalances that have built up, demand has to shift from countries running deficits to countries running surpluses.

The traditional view is that exchange rate movements will help guide these transitions.

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[In fact] exchange rate depreciation will help shift demand, in general, however, such changes take time. The question is whether financial markets will be patient or force adjustments to occur through sharper price changes—notably exchange rates and asset prices—in a way that is destabilizing to the real economy and financial markets.

The most immediate concern in the current environment is whether foreign investors will continue to buy US assets without hiccups for the time it takes for the real side to adjust?

Overall, the bulk of U.S. assets sold to foreigners are still to the private sector.

Given this, it is worth noting that both foreign direct investment and net purchases of equities by non-residents have declined markedly since 2000. The concern is that financing will become more difficult — with consequences to U.S. interest rates and the exchange rate — precisely when other factors make the United States slow and look an unattractive place to invest, compounding the slowdown.

To summarize then, the global current account imbalances have arisen, in large measure as a temporary and uncoordinated response to crisis rather than as a permanent new (and perverse) international order. Emerging markets have recognized the risks posed by volatile cross-border flows, especially given the fragility of their own financial and corporate systems. They have learnt to fit their investment coat within the domestic savings cloth they have available, even leaving a bit over to finance rich countries. The resulting global liquidity, abetted by accommodative monetary and fiscal policies, has led to credit-fuelled housing and consumption booms in some developed countries, providing the needed global aggregate demand. And most recently, imbalances have been accentuated through the oil price boom and by countries resisting exchange rate appreciation. While the imbalances have been financed easily thus far, we cannot be sanguine about them.

The best case scenario is that demand shifts smoothly from deficit countries to surplus countries, even while aggregate world demand grows—the proverbial soft landing. There are two other possibilities. One is that as monetary and fiscal stimulus is withdrawn, consumption demand from the deficit countries, notably the United States, contracts sharply. Domestic demand from surplus countries does not keep pace, and even falls, because external demand has indirectly been pulling investment — for example, in the case of Germany or China. In this worst case scenario, we get a contraction of global demand, with only moderate correction of current account imbalances. A second possibility is that adjustment is forced by the financial side, because the real side is seen as unlikely to adjust on its own. Investors become unwilling to hold increasing amounts of U.S. financial assets, demand higher interest rates and some exchange rate overshooting, which in turn forces U.S. domestic demand to contract. Again, if this happens abruptly, it could cause a slow down, as well as financial market disruptions. Of course, overlaying all this is the specter of protection that could make things worse.

What can policy makers do to help effect the needed transitions? In developed economies running current account deficits, the policy emphasis should be on removing monetary and fiscal accommodation at a measured pace. The United States has agreed that reducing its fiscal deficit is part of the solution and is committed to reducing the deficit by half by 2009. While the goal is welcome, we believe the measures are not ambitious enough, and some revenue raising measures will have to be contemplated, especially in view of Hurricane Katrina and the Iraq war's effects on broader U.S. government spending.

Perhaps the central concern in the process of withdrawing accommodation has to be about consumption growth in the United States, which has been holding up the world economy. U.S consumption growth has to slow because the negative household savings rate is unsustainable. It will slow, perhaps on the back of slowing house price growth. The worry is that it will slow abruptly, taking away a major support from world demand before other supports are in place.

Let me conclude. The world economy has been resilient in the face of shocks, in part due to improvements in the quality of policy. This has allowed a variety of imbalances to build up. While the imbalances have been financed easily thus far, one concern we have is that if financing dries up, it will do so at the worst possible time for the world economy — when its strongest engine falters.

A second concern has to do with protectionism. It is all too easy for politicians to blame other countries for imbalances — after all, foreigners do not vote. The solution then appears easy. Impose punitive tariffs! Yet as we have seen, the imbalances are a shared responsibility, and no one country will be able to solve it unilaterally, least of all by imposing tariffs. And a tariff here will bring forth a tariff there, potentially harming the entire world economy. We have seen the movie before in the depression of the 1930s and it is frightening. It is to forestall such a descent into autarky that the Fund has been arguing that countries should avoid pointing fingers at each other. If instead countries see the imbalances as a shared responsibility, it will help guide the domestic debate in each country away from the protectionism that may otherwise come naturally. We should recognize that the need of the hour is sensible domestic policy reform.

Diary of Lady Shelburne

Like other Victorian biographers, the grandson of the Earl of Shelburne included extracts of letters and other documents in his biography of this politician/statesman of the late 18th century and among the items he included were entries from the diary of Shelburne's first wife, Sophia.

The biography says little about her and few published sources mention her at all. She was 18 when she wed, a young age in an era when delayed marriages were common. Shelburne was eight years her senior and already well established in government. She consequently took on responsibilities as wife of a wealthy and politically ambitious Earl before having much experience of life herself. She managed large households and abundant social engagements while also bearing and raising their first child. So far as I can tell, she did all this very well.

This surprising maturity shows in the diary, which has a deliberate and formal style of a sort we don't usually associate with youth.

She seems to have written it for her own use, but at one point in the entry I've reproduced below she mentions a responsibility she feels toward "posterity, if this Diary should by any means descend to them."

In the extracts within the Shelburne biography there's only one mention of her writing habits. There, she merely mentions that she returned home to write in it while waiting for Shelburne's return one evening.

I plan to give further diary extracts in blog posts over coming weeks, if my interest in this task continues and the time available to me permits. [Update: I've put links to all the Diary posts in the right-hand panel.]


Here, then is a beginning. I'm selecting an entry whose context doesn't need a lot of explaining. Much of her reporting of political events and allusions she makes to these events requires an understanding of the upheavals of the time: the passage and then withdrawal of the Stamp Act, for example, or the election and deposing of John Wilkes. Similarly, many of the people she mentions have significance that she naturally assumes anyone reading the diary would know, and there are very many of them. It would be tedious -- at least here at the outset of this little expedition into the diary -- to explain the importance of events and people she mentions in many of the diary entries.

This is the entry for March 22, 1768. It's not a typical one, as you'll see after I've reproduced a few others. Lady Shelburne was compassionate and generous, but this is the only instance in the published entries in the diary of anything close to pious grand-standing or sentimentality. It's a report on the death of a child. Lady Louisa and Lady Anne were sisters to Lady Shelburne's mother (and thus of course her aunts). Lady Louisa figures in many diary entries. Lady Anne Dawson, not mentioned so often, is pictured in this link. She was 32 at the time of her daughter's death.

Extract from the Diary of Lady Shelburne

22nd. A note from Lady Louisa, who was arrived at Stoke from Ireland, determined me to go and spend the day with her there. I found her looking well, but grown thin, which I was not surprised at. She told me Lady Anne (Dawson) was at Harrowgate and surprisingly well in health; that her attendance on her daughter had been continual, and her sorrow for her of the tenderest, most permanent and reasonable kind, restrained merely by the submission she pays to the power and will of that Supreme Being, whose beneficence had granted her, for eleven years, the most promising of children. I think it right to posterity, if this Diary should by any means descend to them, to relate the most remarkable of many acts of resolution that her sincere piety enabled her to perform, as an example of how parental tenderness ought to operate on such trials, and as a proof that the Divine support can do all things even in a mind torn by grief and a body worn by sickness. In the last visit the physician made her daughter, she followed him out to ask his opinion of her state. He told her that she could not live twelve hours. She then asked him if he expected any struggle before her death. He answered she was so weak he thought she would go off in faintings. Having heard this she returned into the room, and summoning all her courage said to the child, "My dear Henrietta, I have been asking your physician how soon he thinks you will be well, for you have been so long ill we may expect it now every day. He assures me before this time tomorrow , but as all severe illnesses have their crises, you must expect first to be extremely sick and faint, and at last to be quite overcome with sleep, which you have been so long without, that it will be the soundest you have ever had, and when you wake you will be stronger, lighter, and better than you ever remember to have been." The child, who was perfectly sensible, seemed pleased, and asked her how she could know that. To which Lady Anne answered that the course of most illnesses were well known, and that she herself always knew that it would be so in this, as it was one many people had had, but as she did not know the exact time of the crisis, would not talk of it to her for fear of making her impatient. In an hour or two the child called her and complained of extreme faintness, upon which she took her hand and said, "Well then, my dearest Henrietta, think of what I told you." The effect was so blest, that the child smiled upon her and expired.

Here is a citation for the biography in which extracts from Lady Shelburne's diary appear:

Author: Fitzmaurice, Edmond George Petty-Fitzmaurice, 1st
baron, 1846- [from old catalog]
Title: Life of William, earl of Shelburne, afterwards
first marquess of Lansdowne,
Edition: (2d and rev. ed.) ...
Published: London, Macmillan and co., limited., 1912.
Description: 2 v. fronts. (ports.) plates, maps (1 fold.) 23
cm.
LC Call No.: DA512.L3F5 1912

To find this book in a library, click here.

I commute

some days.....

Some days, like yesterday, the greatest occurance is my ride home. Sunny, with temperatures in the 30's, winds from the northwest, gusting to 25 mph. I travel northwest; and so ....

- The sun part: low on the horizon and quite frequently in my eyes.
- The temperature part: low enough to cause eyes to tear and nose to run, fingers and toes to tingle (after a while); colder seeming, of course, because of the headwinds.
- And then the winds: strong enough to require effort equal to a week's worth of normal commutes (so it seemed at the time anyway); like climbing a mountain, I say; taking my breath away; bouncing off buildings and pushing my front wheel (no, I don't want to go that way!)

If there's consolation, it's that I've learned to keep my back muscles from stiffening up -- Use the gears I tell myself, make your legs do the work, breath deep and push out that abdomen.

which side are you on?

A Belgian site called World Standards answers the burning question, Why do some countries drive on the right and others on the left? The author says:

About a quarter of the world drives on the left, and the countries that do are mostly old British colonies. This strange quirk perplexes the rest of the world; but there is a perfectly good reason.

In the past, almost everybody travelled on the left side of the road because that was the most sensible option for feudal, violent societies. Since most people are right-handed, swordsmen preferred to keep to the left in order to have their right arm nearer to an opponent and their scabbard further from him. Moreover, it reduced the chance of the scabbard (worn on the left) hitting other people.

Furthermore, a right-handed person finds it easier to mount a horse from the left side of the horse, and it would be very difficult to do otherwise if wearing a sword (which would be worn on the left). It is safer to mount and dismount towards the side of the road, rather than in the middle of traffic, so if one mounts on the left, then the horse should be ridden on the left side of the road.

In the late 1700s, however, teamsters in France and the United States began hauling farm products in big wagons pulled by several pairs of horses. These wagons had no driver's seat; instead the driver sat on the left rear horse, so he could keep his right arm free to lash the team. Since he was sitting on the left, he naturally wanted everybody to pass on the left so he could look down and make sure he kept clear of the oncoming wagon’s wheels. Therefore he kept to the right side of the road.

In addition, the French Revolution of 1789 gave a huge impetus to right-hand travel in Europe. The fact is, before the Revolution, the aristocracy travelled on the left of the road, forcing the peasantry over to the right, but after the storming of the Bastille and the subsequent events, aristocrats preferred to keep a low profile and joined the peasants on the right. An official keep-right rule was introduced in Paris in 1794, more or less parallel to Denmark, where driving on the right had been made compulsory in 1793.

Later, Napoleon's conquests spread the new rightism to the Low Countries (Belgium, the Netherlands and Luxembourg), Switzerland, Germany, Poland, Russia and many parts of Spain and Italy. The states that had resisted Napoleon kept left – Britain, the Austro-Hungarian Empire and Portugal. This European division, between the left- and right-hand nations would remain fixed for more than 100 years, until after the First World War. .....

The author purportedly quotes the UK Ministry of Transport: “Visitors are informed that in the United Kingdom traffic drives on the left-hand side of the road. In the interests of safety, you are advised to practise this in your country of origin for a week or two before driving in the UK.” Sounds apochryphal and, alas, I can't find any such language on the UK Min of Transp site.


This photo shows Dagen H (Day H) in Sweden, the day on which traffic in Sweden switched from driving on the left-hand side of the road to the right. The H stands for Högertrafik, the Swedish word for "right-hand traffic" - according to wikipedia. The date was September 3, 1967, and the city is Stockholm.

There other good pages on this topic, including:

Which side of the road do they drive on? Edited by Brian Lucas, last updated: August 2005, and:

* http://en.wikipedia.org/wiki/Rules_of_the_road
* http://www.reference.com/browse/wiki/Rule_of_the_road
* http://www.geocities.com/jusjih/driving-rl.html
* http://www.starimage.co.uk/scda/reference/drive_on_the_left.htm
* http://www.amphicars.com/acleft.htm


This photo by Brian Lucas shows a "Keep right" sign on a dirt road on the Snæfellsnes peninsula of Iceland.

underbar musik - perfekt på jobbet

I like a little background music at work but nothing that intrudes if I can help it. After some experimentation, I've settled on two internet radio stations, both classical and both from the far north of Europe: NRK Alltid Klassisk from Norway and Sveriges Radio, SR Klassiskt, from Sweden. They play music that I like (classical chamber works as often as not, with quite a bit of art song -- lieder -- both familiar and interestingly new). It's important that there's little talk and all of it in languages that (a) I don't understand and (b) aren't distracting -- I mean they're not so different from English as to attract my attention nor so close that I'm tempted to figure out what's being said.

I listen the the Norwegian station over Viddiplayer as default and switch to the Swedish one if there's a connection difficulty or I don't like current programming.

They both have lots of different music on offer. Here's a bit more about the Swedish station:

The SR Klassiskt is almost entirely in Swedish, but there's one bit of translation. The station describes itself as: "Classical music from Swedish Radio. Around the clock and worldwide. A selection of 500 years of outstanding hits as well as the lesser known." There's a page that lists current and immediate past selections: Spellistor/Playlists.

Other programing includes humor, sports, rock, hip hop, pop, jazz, folk, news, history, local stations, and quite a bit that I can't figure out.

This is the header banner for SR Klassiskt: