~ Wednesday, October 23, 2002
How to make enemies

Peter Beinart's TRB column in the New Republic has some good points about how attacking Iraq could help the war on terrorism. It also has one really bad argument. According to Beinart, conquering Iraq would allow us to pull troops out of Saudi Arabia, and since the proximity of heathen Americans to Mecca and Medina got Osama bin Laden started on his anti-American campaign in the first place, that would take away his best recruiting pitch.

Now, let's suppose for a moment with Beinart that the growth of radical Islamism really would be influenced by any such concession to bin Laden's complaints (and I'm not convinced of that). Even then, what we know of Osama bin Laden's ideology makes occupying Iraq an even worse problem than being in Saudi Arabia. After all, one of bin Laden's main goals is re-establishing the Caliphate. Bagdhad was the home of the Caliphate for the half millenium when it was at its apex. If we invade Iraq, we won't just be somewhere vaguely near Bagdhad, as we are now vaguely near the holy cities in Arabia: we'll be occupying it. Osama will not be amused.

~ Tuesday, October 22, 2002
Clothing analysis, etc.

Speaking of etc, they have taken up smarmy political-sartorial analysis. Sorry, but I think we had enough of that with the absurd coverage of Gore's earth tones in 2000. Can we please get back to discussing ... policy?

Superstars: Krugman got it right

TNR's etc takes issue with Paul Krugman's contention that Sherwin Rosen's "superstar" theory doesn't work as an explantion of massive recent growth in executive compensation.

The superstar theory--at least in theory--could work pretty well for CEO's, which seem to be the group Krugman is mainly concerned about. In fact, Rosen invented the tournament metaphor Krugman alludes to specifically to explain CEO pay. The basic idea is that companies are hierarchies. Employees face off at each level of the hierarchy to see who'll advance to the next level, and the thing that motivates them to advance is the prospect of higher pay. When you're at the bottom level, you're motivated not only by the higher pay you'll get at the next level, but by the higher pay you'll have a chance at getting if you keep winning and advancing. Butonce you reach the level just below CEO, the only thing motivating you is the pay you'll receive in the very next round. To provide the proper amount of motivation, then, the jump in pay to that level has to be a lot higher than the jump in pay to any other level. Finally, if you take into account the fact that companies have been getting bigger and bigger in recent years, it makes sense that the tournaments would be getting larger and that the winner would be earning more money.

Now, this is a reasonable enough explanation for why
compensation for CEOs is high in a static sense -- not
necessarily correct, but plausible. But the issue
isn't the size of CEO rewards, it is how much those
rewards have grown. On that score, this explanation
is remarkably weak. It's not just that the massive
growth of CEO income has far outstripped the growth of
corporations, it's that big corporations aren't
growing at all in the sense that is relevant to etc's
argument: in the number of workers and the levels of
management bureaucracy. In fact, American
corporations have become far leaner in recent decades.
So, based on the reasoning here, CEOs should be
making relatively less, not more.

Saddam, prisoners, and spin

What struck me most about Iraq's prisoner release was that the official announcement openly admitted the regime is holding political prisoners. I'm trying to firgure out why no one has made a big fuss about this. I'm not talking, of course, about the existence of Iraqi political prisoners -- no one in their right mind had any doubts about that -- but about how the Iraqi government isn't even bothering to hide their existence. Is this a sign of just how confident Saddam is about his survival? Or a sign of how his government is in such a shambles that they aren't up to controlling such a basic spin point?

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