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Re-thinking Economic Policy: An Overview
The global financial and economic crisis of 2008 has brought an urgency to focus on shorter-term policy issues related to managing bubbles, analyzing current development paradigms, and drawing out policy lessons for future action, particularly lessons learned during the past two years. At the same, longer-term development challenges also must be addressed to avoid the mistakes of 1970s and 1980s when managing stabilization issues dominated economic policy making and development economics was pushed aside for a while. For example, with the exception of East Asian countries and more recently India, why are African, Eastern European and Central Asian, and other South Asian countries unable to sustain high growth rates for more than five to seven years? What are the policy implications of demographic changes and climate change? There is a need for policy discussion on frontier topics such as rethinking globalization in trade, finance, and labor; new economic geography; green growth; and inclusive, balanced, and sustainable growth.
The 15th-century Florentine Niccolo Machiavelli is said to be the first to state, "Never waste the opportunities offered by a good crisis." During a crisis, countries experiment with policies and learn a lot in a hurry. This overview shares this learning on early policy responses to the current economic crisis, focusing particularly on specific issues that are of interest to policy makers and practitioners in the developing countries. The overview is a compilation of notes that staff members of the World Bank Institute have used during global dialogues and international seminars and conferences since October 2008.
What brought the world to the edge of an abyss in September 2008? After quickly recovering from the Asian crisis of 1997-98, world economic growth accelerated during the period 2000-07. However, in hindsight, there was a 'perfect storm' in the making as US and European housing defaults began to pile up beginning in late 2006, oil prices doubled in a few months during late 2007 and early 2008, while rice, wheat, and corn prices jumped by 40-50% during the same period.
The bursting of the housing bubbles in the United States and Europe has led to a surge in defaults and foreclosures1, which in turn has led to a plunge in the prices of mortgage-backed securities — assets whose value ultimately comes from mortgage payments. These financial losses have left many financial institutions with too little capital — too few assets compared with their debt (US financial firms lost over $1 trillion by Dec 2008). This problem is especially severe because households, corporations, and government took on so much debt during the bubble years (that debt cumulated to over 400% of US GDP in U.S. and about 450% of UK GDP).
There were many other culprits. A long period of abundant liquidity, rising asset prices and low interest rates, in the context of international financial integration and innovation, led to the build-up of global macroeconomic imbalances as well as a global "search-for-yield" and general under-pricing of risk by investors. Complex, non-transparent instruments were mispriced and misunderstood. Regulators in some cases facilitated, and in other cases failed to respond to, the build-up in imbalances. Service providers, including credit rating agencies, loan originators and payment collectors, were also involved. Is it crisis in corporate governance or is it government failure, or is it both?
What has been the immediate impact of the crisis? World output declined by an unprecedented by 2.25% (annualized) in the last quarter of 2008. Global trade and industrial activity have fallen abruptly between October 2008 and January 2009. All the major industrial economies entered a period of deep recession, and several emerging markets were sputtering in late 2008. Emerging and developing economies' growth has decelerated abruptly to 3.25%, mostly because of external pressures—lower foreign demand, reversal of capital inflows (including FDI, portfolio flows and remittances) and plunging commodity prices. But, the reforms of past decades and accumulation of large foreign exchange reserves made emerging markets more resilient than in previous crises and were faring relatively better. Anemic global growth has reversed the commodity price boom and lowered inflation. These price declines (except for gold) have dampened growth prospects for a number of commodity-exporting economies. About 64 million people may have been pushed below the poverty line during the first few months of crisis. If the Asian crisis is any indication, poverty is likely to be much higher in several affected countries long after the global economy recovers.
Why the need to upgrade the foundations of economics and policy? As Krugman and others have pointed out, economists have been divided into two groups – those believing in primacy of free markets and those advocating a greater role for government in regulating the markets and protecting the consumers from the excesses of the private sector. So a false dichotomy was being set up and discussed. There is a need for paradigm shift as both market and government are complementary and both are required, and economics is pluralistic. The basis of economic behavior itself is questionable --- we are rational more often than not, but animal spirits take over in many instances, such as when we are investing. Herd behavior is common as witnessed not only in the financial crisis, but in our penchant to acquire houses that we cannot afford just because everyone else is buying houses, in trading stocks, in ensuring adequate food supplies before a cyclone, or when buying things which are on sale shoppers rushing into a store even trampling people during that rush. It is said that greed and fear drive Wall Street, but as T.D. Wilson in his book "Strangers to Ourselves" points out human beings operate both unconsciously as if on an autopilot and consciously. Decision making by the unconscious mind as well as conscious mind can both be disastrous. For example, when we are trying to hire someone for a job, within a split second we may decide if we like or dislike a candidate (unconscious decision), but we take a long time before deciding if we should invite someone for dinner (conscious decision). Behavior economists find a ton of inconsistent behavior in our day to day life. Behavioral economics and neuroeconomics suggest that rational behavior by economic agents at all times could be questioned. The mind has its own highs and lows depending on what we are doing, as if we are all on 'drugs'.
Pricing mechanism works well in a market for oranges and apples, but it may not work well in a few other markets. There are deterministic and stochastic economic processes. The Economic world is a pluralistic world, a world of multiple equilibria and nonlinearity with threshold effects. Moreover, production, trade, distribution and marketing are now in the hands of large firms and multinational corporations. At best, big business is now 'oligopolistic' in its market structure, colluding with political power to protect its economic interests, and resorts to monopolistic pricing to the detriment of its consumers. Just because there are a few market failures does not mean that we need to return to the commanding heights of the state and abandon markets. Why have the well-established political, financial and regulatory institutions of the US and UK failed then during the run up to the crisis, and why the much 'underdeveloped' institutions of BRICs and other emerging markets managed to work well in managing the crisis? Under these circumstances, why would Basel II or III financial architecture work better?
Changing Paradigm. This sentiment of combining the market mechanisms with an important role for government, depending upon a country's stage of economic development is called new structural economics. A lower income country may require the government to provide a lot of public goods, such as education, subsidizing technology development and adaption, and so on, while an advanced economy may require a regulatory role by the government and clearly a less prominent role of the government. This is the new structural Economics framework that requires government to reinforce the comparative advantage of its country (and not in comparative advantage defying strategy). But how can one explain growth in India since 1991, which is despite government, while in China it is because of government since early 1980s? How can one explain the diverse economic and political performance of India, Pakistan and Bangladesh, who were all part of British India until 1947 and who inherited the same initial conditions, behavior and institutions from their colonial master?
The essential open-economy model could now include newer dimensions, such as animal spirits in some markets of finance and investment but rational expectations in product and labor markets, the role of financial intermediaries in the overall economy, monopolistic firms and pricing in most markets, assets in consumption, investment, and Central Bank objective function (expanded Taylor rule) and international finance accelerator to capture the massive global financial flows (which are multiple times the value of world real GDP). When models are upgraded to bring in 'realism' the fiscal and trade multipliers are likely to be much smaller than hitherto estimated.
The need for fiscal activism to shore up aggregate demand during a recession or depression as espoused by Keynes has returned to vogue. However, early indications in the score of countries that resorted to fiscal stimulus packages is that pump priming is not working that well in a globalized world where additional spending leaks out in the form of higher imports and higher household savings in US and the world. The magnitude of fiscal multipliers may be just around 1, moreover, the tax refunds that US resorted to in mid-2008 did not prevent the recession of late 2008. Keynes never discussed the 'law of unintended consequences' and governments may have created newer bubbles by resorting to fiscal stimulus packages. Fiscal stimulus may stimulate demand for a short period of time, but prevent quick adjustment of the real economy and job creation, and relegate the economy to 'mediocrity' for quite some time. If the choice is for an economy to 'muddle through' or 'painful adjustment', politicians –given their penchant to seek re-election and obfuscate policies and programs– will invariably choose the muddle-through option. Hence, the popularity of fiscal stimulus packages, bailouts without conditionality, and liquidity provision at zero interest rates. The poor face less delivery of services and higher unemployment (e.g. over 20% unemployment rates in poorer neighborhoods in the US in early 2010 despite massive fiscal stimulus package) and the tax-payers invariably pay for these expansionary policies that re-distributed wealth from the poor and the middle class to the financial sector. The stimulus financed programs are supposed to be timely, temporary, and targeted, but in reality they end up being protracted, permanent and un-targeted. Government interventions can worsen and prolong the crisis by creating 'new bubbles.' Of course, one can argue the counterfactual – things would have been even worse if it were not for the stimulus packages. There is an argument to be made that fiscal stimulus could take the form of financing 'greener growth' through subsidies and tax cuts for promoting lower carbon emissions whether it be in household appliances, production practices, or car manufacturing.
Modern macroeconomics does not incorporate the role of financial intermediaries in their models. The structure of banks and financial intermediaries does not matter in current economic models. Banks used deposits (which are protected by deposit insurance) as a base to generate loans and provide credit. Monetary policy also affects the economy through the quantity of bank reserves and thereby bank credit. We know that financial firms create financial instruments, particularly during a boom, that provide credit to finance the boom. Minsky (1982) outlines that at the beginning of the credit cycle, the duration of the loans is longer but gets shorter and shorter during later stages of this credit cycle as new loans are basically given to service the interest on previous loans (the so-called greening of loans). In such a way, the Minsky-Kindleberger theories emphasized irrational myopia and herd-like behavior causing endogenous cycles as greed and fear dominate banking and investment behavior rather than rational, long-term projection of fundamentals. While greed leads to under-pricing of risk, fear leads to over-pricing of risk. While the U.S. mortgage crisis can be partly explained by greed and fear, it does not explain the timing of the crisis, the duration of credit cycle in US and why it is of different durations in different countries, and how long will a financial collapse last.
Monetary policy is challenged by how best it can manage credit growth and asset bubbles. The "Great Moderation" speech of 2005 by Fed Chairman turned to be 'a chimera.' Too much emphasis on inflation, targeting it as close to zero as possible, may have had huge costs in terms of real output. Monetary rules are needed to manage aggregate credit growth that considers output growth and sectoral allocation of credit (e.g. how much to housing or financial sector). Most central banks in developed and emerging economies use the Taylor-rule for monetary policy and this rule needs to be augmented with newer set of variables, such as assets, in order to prevent asset bubbles and rapid credit growth.
To minimize credit bubbles in the future, policy makers should: (i) develop an international system to monitor leveraging by banks and financial institutions, particularly the large ones, including leveraging among the various sectors in different geographic areas. Developing such a "heat map" is necessary because central banks are usually unable to identify credit bubbles but can monitor leverage ratios at micro- and macro levels; (ii) Encourage banks to develop risk models that include leverage ratios and internal risk-adjusted weights in each of the real sectors. Can private sector risk managers do it by themselves? Not really; the private sector has invested heavily in risk management tools and progressed quite a bit in its use of quantitative and qualitative tools, but private sector risk managers would need the help of global institutions, which have an advantage in comparing and contrasting across countries, sectors, and firms. Stress testing by the private sector has failed. The behavior of financial firms and their counterparts has been disappointing during this crisis because the best risk management would have been for the credit agencies to insist that mortgage originators have a stake in the debt instruments at all times; (iii) Regulate pockets of leverage (for example, trade brokers in certain institutions), including by ensuring more capital for such highly leveraged firms, by increasing margin requirements, or by imposing restrictions such as loan-to-value ratios for housing loans. Capital requirements are necessary but not sufficient; (iv) Phase out the distortions arising from bias in terms of directed credit and tax exemptions for the real estate.
After the Asian crisis of 1997, emerging markets appeared to move towards a bi-polar exchange rate regimes (fixed or flexible) but since the collapse of Argentina one to one peg to US dollar in 2001, and because of fear of full float of local currency, central banks have stuck to 'intermediate regime' of flexibility. It is now shown that this flexible and intermediate regime, yields benefits in terms of higher output growth and lower inflation. Moreover, capital controls are now being used to manage outflow of capital in emerging markets.
Exchange rate regimes. At the time of the crisis, most large developing countries had established more flexible exchange rate regimes. Local currencies depreciated sharply during August to October of 2008, but on average the depreciation was in the range of 8 to 10%. But the currencies of Brazil, Chile, Colombia, Hungary, Mexico, Poland, Turkey, and South Africa experienced much larger depreciation in the initial months of the crisis. Some central banks intervened heavily to slow down this depreciation and lost large reserves in doing so. The apparent immediate response by developing countries during those three months was to target policy more to address domestic conditions rather than to defend exchange rate levels. Interest rates were increased during the early months of crisis of 2008, but when compared with other emerging market crises of previous decades, the interest rate increases were very mild.
Since the early months of the crisis, expansionary fiscal policies and monetary easing in more than 40 countries have been put in place to avert a serious economic downturn. These measures will put additional pressure on specific currencies to depreciate against U.S. dollar and other major currencies.
For almost a decade, international economic observers have advised governments that the world needs a major adjustment. Sustained global growth requires that the United States cut back on its domestic demand and let the dollar depreciate to increase net exports, which will enable the United States to improve its current account balances. Conversely, China and other Asian countries should stimulate domestic demand and let their exchange rates appreciate. These steps would rebalance aggregate demand from the United States and toward China, which would help sustain a global recovery.
Export-led strategy and Industrial Policies. Export-led strategy is about exploiting comparative advantage and trading for mutual gain of all countries involved. Trade brings in its train increased competition among firms, access to new technologies and new practices that enhance productivity. Global trade means advantage of economies of scale (large markets). Countries that are succeeding in export diversification have large pool of skills from production to marketing. But, trade is now in the hands of large conglomerates, and multi-national corporations, and production is now scattered in different countries. Therefore, new comers in most activities and sectors have a difficult time to compete in an 'oligopolistic' market structure. In theory, a firm (or country) has a comparative advantage in labor-intensive traditional sectors, but the firm (or country) with government support embarks on a somewhat risky, skill-intensive activity. In general, as the skill level crosses a certain line, the marginal cost declines steeply, but as the skill level grows further, the productivity ceases to grow at the same pace, and the wages in the primary sector outpace it. This trend happens because skill level does enhance productivity, but it does so to different degrees during the product's life. Thus, productivity takes the form of a U-shaped curve. In the beginning, the wage rate, as well as the skill level, is low, and the country is forced to import. Gradual familiarity leads to more productivity. Despite a concomitant rise in wages, such productivity gains lead to increased exports. A further increase in the wage depletes the comparative advantage in a particular product. Thus, the nation is forced to produce another good that uses labor less intensively, and higher-skilled workers can be used more effectively. This story explains a country's gradual upgrading of exports, from textiles to chemicals to iron and steel to automobiles and, finally, to electronics. The Republic of Korea and Finland are two examples of countries that have used this approach.
As one nation grows in skill and its products are upgraded from labor-intensive to capital-intensive goods, another nation grows and takes over the market in labor-intensive products. This phenomenon happened in East Asia. A skill ladder began with Japan as the most skilled country, followed by other Asian Tigers. Kojima (2000) extended the flying geese model to incorporate the transport of one industry to another country, where the wage is lower, even though the productivity of the workers in the second country is not as high as in the parent country. This gradual shift of comparative advantage causes a high growth rate in a particular economy at a particular time. For example, Taiwan, China, supplanted Japan in the production of certain goods when Japan lost comparative advantage in that industry.
The further the government moves away from comparative advantage, the more the costs of subsidization and support increase and, over time, become fiscally burdensome. Moreover, once government support is withdrawn, the industry may become uncompetitive, may generate fewer surpluses and resources to reinvest, and may have to close down. When such support is stopped, the industry's profits evaporate, whereas in the private sector they do not. Opponents still believe that East Asian countries would have grown even faster had they not used industrial policies.
The new industrial policy group argues that state intervention is needed in R&D and innovation policy to encourage low-carbon, high-growth industries. The group argues that the private sector does not internalize the carbon emissions, and state intervention will deal with this negative externality. Why did information technology (IT) industries take off in India and Ireland without state intervention? Is the success of East Asian countries attributable to their trade openness strategy rather than to state intervention? Or do both state intervention and openness together make up a successful recipe for rapid development? Is there an export-diversified strategy for developing countries that works most of the time? Is the new industrial policy more appropriate for the 21st century?
The financial system, measured by assets, profits, contribution to GDP, stock market capitalization, employment etc, has expanded rapidly since 1990. For example, global financial assets were about 50 trillion in 1989 and increased to about 200 trillion by 2007, during the same period financial depth increased from 200% of world GDP to 400% in 2007. The financial crisis has raised a plethora of issues, many of which are inter-twined. There have been failures on all fronts – market failures in the form of financial firms innovating new instruments while neglecting risk management practices, credit rating agencies failing in rating assets without much thought to risk, private auditors not checking Lehman Brothers' assets and liabilities, government failures in the form of central bank keeping interest rates low in the run up to the crisis, and government entities such as Fannie and Freddie involved in mortgage lending and making enormous losses, and failure by regulators for not checking the books of financial firms such as Lehman Brothers that were moving toxic assets of the balance sheets, and last but least the financial economists who failed to foresee to crisis. There is plenty of blame to go around but one thing is clear: State ownership of financial firms is back. After decades of rising foreign ownership of banks (shrinking state ownership) in almost all regions, except Middle East and South Asia, the trend could be reversed especially in the developed countries.
The crisis has shifted focus from foreign private ownership to some state ownership, from micro to macro prudential regulations, to re-assessment of deposit insurance, lender of last resort, and implicit guarantees, to consumer protection and taxpayer protection, from mark to market accounting to mark to funding, to revamping of credit rating agencies, to crisis in corporate governance and questioning of remuneration in financial firms, and to strengthening of supervision. These and a number of related issues of interest to policy makers are discussed below.
Given the large set of issues arising from the crisis, the major challenges facing countries are essentially two: (i) Government entities which are subsidizing directed credit (e.g. Frannie and Freddie in USA; similar type of 'chaebol' lending to industrial firms triggered the Asian crisis of 1997; and (ii) universality of too big to fail entities, where systemic important firms, often politically powerful conglomerates that are controlled by elites, have to be bailed out, which in turn leads to the moral hazard problem, where the large entity is considered worthy saving at all costs, including use of lender of last resort facilities from the Central Bank and tax payers money from the Treasury. The too big to fail entities also then knowingly max-out on leveraged lending (40 to one in case of USA) and 'gamble' on financially innovative instruments (e.g. mortgage-backed securities and credit default swaps in case of USA). The large entities also have the political clout to suppress regulations and/or evade regulations. Successful regulation requires that the regulator should have information on exposure to systemic risks. Too big to fail institutions were exposed to CD swaps (e.g. AIG in USA) and we knew little about its exposure. The reason is that there is data on a firm by firm but there is no agency that can put it all together. But policy makers and politicians are reluctant to address these two problems head on. Instead the focus on a large set of problems, as detailed below, and obfuscate the issues.
Until the crisis, capital ratios of individual banks are assumed to be adequate for the stability of the entire financial system. But in an inter-connected and leveraged financial world, selling of an asset because it is deemed risky by one financial firm may be good for that firm but if all firms sold the 'toxic asset' around the same time, the price of this asset will plummet and lead to wide-spread liquidity problems, losses, and heighten the uncertainty in the system. A macro-prudential approach is needed to look at risky assets taking into consideration the existence of liquidity risks, market risks, credit risks, insolvency risks, and other forms of risks. The recent crisis has shown that market discipline is not a defense against macro-risks. During booms, securitization appears to help improve the safety of financial firms, and most financial firms show good assets and strong balance sheets but when crises follow the booms these very firms have bad assets and bad balance sheets. For example, in March 2010 it was revealed that short-sellers in September 2008 were worried about the Lehman Brothers book-keeping, who were parking their bad assets with mutual funds while showing good assets on their books. In this case, market players knew more than regulators, but neither the market players nor the regulators were able to assess the macro risks. Therefore, differentiation of good versus bad banks and good versus bad assets is very poor.
The G-20 meetings of March 2009 recommended that during booms capital buffers be built so that during busts these buffers can be drawn down. For example, financial stability committees that exist in a number of countries could recommend that capital requirement ratios be kept relatively low during bad economic times but increased to twice as much during periods of a boom. Similarly, mismatches between maturity of assets and liabilities can be regulated through capital requirements. The Geneva report of 2009 recommends that a two-year asset that cannot be posted with the Central Bank should be matched with a two-year liability. Any mismatch should be prone to increase in capital ratios, over and above the boom-bust capital requirements. It is hoped that stacking of capital requirements would prevent systemic failures.
Financial Policy should be mandated first to deal with credit booms. Given the limitations of monetary policy, such as interest rate increases in dealing with booms, prudential and administrative measures may be better targeted and less-costly. For example, minimum regulatory capital requirements should be increased during booms and lowered during downturns. Similarly, limits on sectoral loan concentration, tighter eligibility and collateral requirements for booming sectors, limits on foreign exposure etc could have been deployed to contain risks associated with credit booms and busts.
Booms and busts are inherent to the financial world, and the aim is to moderate the risks during the cycles using micro and macro prudential regulations, as well as other measures such as strengthening supervision. Supervisors need to focus on both micro and macro analysis and oversight, work more closely with Central Bank regulators, and be more proactive in restricting specific firms that are lending too much against housing or properties or other risky assets.
Another regulation that is being discussed is the introduction of mark to funding accounting to complement the current mark to market or fair value accounting. In a liquidity crisis, the market price of assets fall more precipitously below the present value and this triggers the need for capital requirement. Under mark to funding approach, a weighted average of market price and present value of asset could be used, with funding institutions proposing the value of the weights. This may moderate the risks to the financial system.
Furthermore, the interaction between macroeconomic policy and financial sector should be improved. In every country, macroeconomic and financial stability is generally separated. While macroeconomic policy is focused on low inflation and high growth, financial sector is focused on bank-by-bank supervision of formal sector banks. Past crises and the current one again show that shadow financial and non-financial sector (e.g. investment banks, hedge funds, housing societies, government-secured enterprises etc) carry large risks connected with credit growth, leveraging and asset prices. Several prudential measures are needed to deal with these set of issues. In addition, the macroeconomic policy is concerned with corporate sector and how it finances the investment spending, including the public private infrastructure. Monetary theory and policy is concerned primarily with credit channel as the transmission mechanism. Such an approach is based on past thinking of credit rationing and crowding out among competing demands of public and private sectors. Meanwhile, the financial system has become too innovative and revolutionized investment financing mechanisms. For example, the private investors are interested in maximizing their profits but this is not taken into account in defining the objective function of the Central Bank.
Do Institutions matter? We were told that in the presence of social conflict between various groups, between haves and have-nots, political power precedes political institutions, economic institutions and economic policies. But, political power could be de jure (due to constitution, fair elections and smooth transition to political power) or de facto such as dictatorships and authoritarian leaders usurping power by coups and violence. Sixteenth century colonialism established 'settler' and 'exploitative' institutions depending on the then existing 'climate' in the colonized countries. For example, if the climate was unbearable and malaria-stricken, the colonial masters established an exploitative relationship of shipping out natural resources. If the climate was hospitable, they settled in with family in these countries and started administration and other institutions.
More recently good institutions were supposed to emerge when only de jure political power is in place. Also, a political and legal system that places constraints on elites is often conducive for better institutions. Following this logic, institutional economists have reasoned that advanced economies that de jure democratic political institutions have smooth transition, predictability and place constraints on elites and abuse of political power and have strong institutions that ensure a system of checks on the executive, law and order, property rights etc. The theory of institutions is that bad policy outcomes is the result of bad institutions and these are common in developing countries, where the distribution of political power needs to be reformed and deeper causes need to be strengthened. Others have argued that market-oriented institutions are important for economic policy management. By this categorization, the advanced economies had better institutions that led to sound economic performance and consistently higher economic outcomes.
How can we now explain the 'mass delusion' that occurred in the Wall Street during 2007-08 aided and abetted by government, political institutions (Congress) and economic institutions (Central bank, major financial institutions, regulatory agencies, credit rating agencies, and so on)? How is it possible that the better institutions in advanced countries had mismanaged risk so badly? How could 'relatively bad institutions' of BRICs manage to stave off a global crisis and manage their own 'financial rogues' better?
Olson (1965) argued that interests of the elites are narrowly defined as they prefer local and regional public goods rather than national public goods that are beneficial to all segments of population. They prefer government spending on social sectors for their benefit, bailouts and subsidies and transfers that are supposed to benefit the poor and vulnerable groups, but which they can capture, while at the same time they want to pay lower taxes. Crisis in corporate governance in the form of excessive-risk taking by the CEOs of financial firms, and not being held accountable or checked in time by stakeholders and boards, are symptoms of this broader societal problem of 'privatizing gains and socializing losses.'
More recently, there is a growing body of work on the influence of politics on economic inputs (e.g. government policies and programs) and economic outcomes. Douglass North's insight is that politically determined structures (of property rights, government spending allocations, etc) do not necessarily maximize the efficiency or growth potential of the economy. Rather the politically-determined structures try to maximize the returns to the political leaders/rulers/strong groups ("elites"). If we follow this logic, then both developed and developing countries distort allocation of resources and retard growth and development. Others have argued that patron-client relationship is rampant in policy making in both developing and developed countries. Bates (1981) argues that collusion between urban-based interest groups and political elites resulted in punitive taxation of agriculture. Adam and Connell (1999) note that in countries where restraining-institutions are absent, the government is likely to be captured by a small group and trade-off growth for redistribution that is beneficial to the favored group. More recent work by Acemoglu (2005), Easterly and Levine (1997 and 2003), and Alesina and Ferrara (2005) is along similar lines of state-capture by elites, whether it is along urban-rural divide, economic sector interests (agriculture versus manufacturing) or ethnic diversity or due to ethno-linguistic fractionalization.
However, we now know from 60 years of development experience that South East Asian countries (authoritarian regimes with few constraints on executive) have generated successful economic outcomes, while African countries (mostly with strong rulers) have had relatively less success. To explain this contrast, political scientists and economists use the concept of "weak and strong economic states." Weak economic states lack/have limited capacity to tax, regulate and play a developmental role (e.g. African states which cannot extract revenues from the rest of the society and fail to invest in public goods). In addition to weak capacity, we also know that self-interested elites will only invest if future private rewards are attractive. When the state is weak, the elites are uncertain about the future and are likely to appropriate fewer rewards, if any, in the future (Acemoglu, 2005).
State capture could be defined as the efforts of affluent individuals or groups, private firms, or oligarchs, to shape the laws, public policies, rules and regulations of the state to their own advantage. This 'shaping' may be done not only by the private firms or richer elites (top 20% on the income distribution scale) but in some countries by ethnic groups or powerful economic groups. As such, to fully understand the dynamics of state capture, the analysis must be based on winners and losers not only in terms of income groups but also in terms of powerful groups and vested interests, including bureaucracy. In other words, state capture and re-distributive conflicts are part of the same spectrum of good-to-bad governance.
Countries that are 'highly captured' may exhibit capture of all or most institutions by 'big business' and powerful groups. As such parliament, political parties, the executives including ministries and public enterprises, judicial courts, and bureaucrats, may all be captured. The capture may take place jointly or separately depending upon the economic interests of the powerful groups or elites. So a highly-captured country, in the absence of effective institutions, is likely to suffer from low tax revenues, lower private and public investment, higher redistribution, and therefore slower output expansion, and lower level and quality of public provision of services to the poor.
So bottom line is that state capture (of institutions, regulations and economic policy) is happening in almost all countries and this should be avoided; otherwise economic outcomes will be bad, or would they? How does one avoid state capture? There is a need to continuously promote competition but this is not automatic just because there is freedom to compete. Powerful, vested interest groups, usually large oligopolistic firms, capture the institutions and the benefits of market-oriented reforms (e.g. in the transition countries, the oligarchs benefited from privatization and de-regulation of prices and investment). In advanced, transition and developing countries, domestic and international cartels and anti-competitive business practices have taken hold in product, trade and financial markets. In fact, the OPEC cartel in crude oil, and food additives, steel, large transformers and pharmaceutical products, and trade in a number of areas (from bananas to arms sales) is dominated by firms from the richer countries.
There is a need for breaking up the too big to fail institutions and curbing the monopolistic firms, and to encourage civil society groups to organize and advocate, for consumer protection agencies, for community-driven development, for encouraging small and medium enterprises, for fiscal and political decentralization though decentralized units are shown to be as 'captured' as centralized units, for term limits on elected or nominated officials in executive, legislative and judicial bodies, curbing the revolving door of patron-clients, and above all for more punitive punishment for 'white collar crime' of financial fraud and pension-raiding, and of course 'enlightened leadership.'
Geography of Urbanization has become an important issue. Governments can to a degree manage the growth of existing urban centers and the in situ expansion of small towns into cities through investment in transport and other infrastructure, through regulations and land use rules that strictly control whether a piece of land is developed and for what purpose it is developed. For example, the urbanization of high risk flood-plains, coastal areas, steeply- sloped areas, earthquake prone areas, and regions where water will be increasingly scarce could be tightly regulated and existing habitation gradually scaled back through tax policies and other actions that fully reflect the costs of insuring against risks. Such actions will undoubtedly face intense opposition2. Awareness raising programs coupled with a gradually tightening of implementation is probably the only way forward. This is not a knowledge gap problem: it is one arising from the unwillingness to write off sunk costs, the continuing attractions of coastal regions and long settled urban areas, legacy transport infrastructures, and in developing countries, the combined pressures exerted by population growth and urban migration. The great challenge will be in winning sufficient political support from a majority of the stakeholders and implementing a partial deconstruction and rebuilding of cities. This is a project for the long term, something politicians are rarely inclined to tackle, leaving it to future generations to worry over.
Land use planning and zoning laws, real estate taxes, floor area ratios, and the urban transport infrastructure are among the instruments governments can use more effectively to build low carbon, sustainable cities that grow vertically. But few are doing so and awareness of the need for raising urbanization to a new level so as to avoid future crises is spreading slowly. It goes without saying that starting the process of constructing "smarter cities" now while there is time has many advantages with regard to planning and execution. Whether the threat of climate change and resource constraints will triumph over scientific illiteracy, denial and procrastination to strengthen implementation, remains to be seen.
Reinforcing urban design with measures to reduce carbon emissions can conserve water and minimize heat island effects. This is a necessity not an option. Large gains are possible from better harnessing of tested and cost effective technologies which remain underutilized because of inertia, ignorance, and the desire to avoid initial costs even when they can be rapidly recouped. Pricing policies [especially for energy and water], codes and standards for buildings and appliances, incentives for new technology adoption and research, road pricing and other measures can achieve dramatic results. ICT now permits the building of integrated electricity and water utilization systems that can monitor use, differentiate prices by time period and user, and reward frugality. However, the experience of even advanced countries in phasing in codes, standards and road pricing for example, can be a salutary reminder of how stoutly a raising of standards and monitoring is opposed and the slow acting, slippage prone nature of localized enforcement especially under decentralized conditions.
Economic sustainability is key. Urban location and macro and social stability are among the preconditions to be met. Other well rehearsed requirements subject to policy control include adequate infrastructure (now including IT infrastructure), a skilled workforce, serviced land,3 affordable housing, connectedness to other cities, acceptable levels of congestion and pollution, decent public services, and business friendly environment, etc. This is a long and familiar checklist. The reason why so many cities are falling short of their desired benchmarks is because leadership, governance capacity, and resources are all too frequently lacking. Again, there are no easy answers to the above.
This also is well traveled ground with few innovations to report. The local tax and pricing tools, the center-local fiscal arrangements, and the avenues for raising capital from financial markets, are all familiar. So also are budgeting, accounting, and auditing procedures for efficiently allocating funds and minimizing leakages. Adequate municipal financing [which derives from a buoyant broad-based economy] and fiscal discipline, nationally imposed and municipally reinforced, are inseparable from long run urban sustainability.
The competitiveness of manufacturing or in rare cases tradable services e.g. IT enabled services, business services and software, is a function of factor costs, the quality of the workforce, and of connectedness. Municipalities can influence these through the setting of rental rates and charges for power, water, sewage, and other services. Incentives – and locally sponsored technical and consulting entities – can enhance the supply of skills. But lower-middle and middle income urban centers must look beyond the low cost model of competitiveness and derive more of their edge from technological prowess and innovation. Building innovation capability is widely viewed as the quickest route to prosperity because the intense competition squeezes much of the profit out of standardized commodities. Only through ceaseless differentiation of products and innovation will suppliers earn the quasi rents which can fuel rapid growth. Innovative urban economies are also better able to cope with fluctuations in demand and to recover from shocks by evolving their product mix and attracting new activities.
Technological change seems to be influenced by five sets of policies and institutions:
- Policies affecting the composition of industry and of acquired technological capability and the contribution of FDI to this capability.
- Education and research policies that determine the foundation-building strengths of primary and secondary schooling, the quality of tertiary education, and the volume and productivity of R&D in universities, firms and specialized institutes.4
- Sociopolitical institutions that assign status and recognition to learning and encourage intellectual achievement, safeguard intellectual property, and promote openness to ideas and to the circulation of knowledge workers.
- Institutions that stimulate competition among producers of ideas, of goods, and of services that regulate performance and set standards.
- Policies affecting the productivity and innovativeness of urban centers.
Policy makers are working on all these registers; however, tangible evidence of innovativeness is materializing slowly as experienced researchers, intermediaries, and venture capitalists aggregate into critical masses and an innovation culture gels within rapidly evolving urban environments. Typically, a strong desire exists to hurry the process along. Countries need first to build their knowledge base and to move closer to the frontiers of technology in selected fields. When countries reach this state, greater scope exists for sustained innovation. Acquiring this technological capability is no simple matter, however; the process of adoption and adaptation remains uncodified. After countries have acquired substantial technological depth and are near the frontiers of knowledge, what might push the system they have created to deliver high and persisting levels of innovation or any significant innovation is difficult to determine. Spending on R&D can help; the innovation strategies of major firms can make a contribution, especially if they spin off innovative firms; new entrants can serve as bearers of technology; and the excellence of the research universities can feed the pool of skills, ideas, and entrepreneurship. Beyond this, there is little concrete to say. Whether research can fulfill the demands of national policy makers and chief executive officers who would like to make innovation routine remains an open question.
1. It is estimated that in the United States there were almost 7 million housing loans 'under water' and close to default, each loan averaging about $300,000; this totals to $2.1 trillion. In addition, potential defaults on credit card payments, student and car loan payments are estimated to be in the range of about $10-12 trillion. The government could have directly taken over these bad housing loans and loans held potential defaulters but moral hazard (rewarding bad behavior will incentivize even non-defaulters to default on loan payments) can exacerbate the problem.
2. In full awareness of the risks of living in flood plains and building homes on steeply sloped hillsides, people are undeterred. After each disaster, the rebuilding begins.
3. Including technology parks and incubators.
4. Patenting by Korean residents has been influenced by both the spread of higher education and the increasing expenditure on R&D (Lee and Kim 2009).
- Tags:
- The World Region [1]
- Financial Sector [2]
- Industry [3]
- Information and Communication Technologies [4]
- Trade [5]
- Macroeconomics and Economic Growth [6]
- Science and Technology Development [7]
- Social Development [8]
- Urban Development [9]
- Macroeconomic Management [10]
- Advances in Development Economics [11]
- Financial Systems [12]


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morris tabush needed a new button or icon design and created a contest on 99designs.
A winner was selected from 19 designs submitted by 8 freelance designers.
Tabush NOC Icons
We are an IT managed services provider. we need 2 sets of icons for our management software which will go onto our client's computers.
1 is an agent icon, for the software, which will have 4 statuses (online, offline, blinking, remote control disabled).
2 is an icon for our Antivirus software, which has 3 statuses (online, offline, news, and scanning (animation).
small to medium sized businesses
both should incorporate our logo somehow.
agent icon: need 4 versions of the icon, all to be similar, again to be for the following statuses: Online, Offline, Blinking (alert), and "RC Disabled".
Need the agent icon set in 3 formats:
Windows: .ico format, color depth not to exceed 256 colors, 32x32 pixels
Mac: .tif format, RGB 32 Bit color, 32x32 Pixels
Linux: .png format, 32x32 Pixels, 256 colors
Antivirus Icon:
This should be something that represents security (maybe a shield or something) with our logo or just our "T" part of the logo on it (the logo part should be smaller than the shield or whatever symbol).
it should come in 4 versions:
online - maybe green to show "all OK"
offline - maybe the shield is grey
tray news - same as online with some type of envelope or highlight
scanning (animation) - maybe a color changing or something?
all icons should be 16x16 PNG except for the scanning animation, where it should be 32x16 and you put image A on the left (16x16) and image B on the right (the software will automatically cycle through them)
i am attaching my logo, from it only use the oval T - don't use the word "tabush" in the icons you create.

subset: commoncrawl


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William F. Buckley Jr., the father of modern conservatism died yesterday after living a very rich and productive life, influencing modern political thought, and setting the stage for the Reagan Revolution which saved this country from the years of Jimmy Carter.
Although I have never met the man, I do have stark memories of him throughout my childhood and since, as my father was a huge fan of Firing Line. As a child I hated it. My early memories of Buckley were of dread. I dreaded Sunday afternoons when my father would enter the family room and switch channels to PBS, and subject me to that dry, drab, and stuffy show. After that I would switch channels to 60 Minutes, a favorite of mine at the time. How things have changed.
When I was approaching 17, Buckley was featured on 60 Minutes (I nearly left the room, expecting a dry, drab, and stuffy interview when I saw it previewed), and much to my surprise...he was artfully clever, lively, quick witted, and funny. I think Morley Safer tried to strafe him but failed. Buckley impressed me then and thereafter. And even though I never quite got in the habit of watching Firing Line, I made a special point to catch him in several interviews, and even subscribed to National Review for a time.
I'll never forget one interview he did on Donahue back in that show's heyday. Phil Donahue tried a surprise attack in which he accused Buckley of being "owned by the military establishment." Buckley's response was calm but gravely cold. He glared at Donahue and said dismissively "No one owns me, Phil...only GOD owns me."
More recently I purchased Miles Gone By, his autobiography, in CD format. I strongly recommend this format because it is read aloud by Buckley himself, and you get every nuance from his voice inflection and tone. The only thing better would be a Buckley video of the same book.
Someone recently told me that Ann Coulter was banished from National Review. But that didn't stop her from writing a fine tribute to Buckley here.
May he rest in peace. And may the Buckley family be in our prayers.


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Annalee is asking costumed fans roaming the halls of WonderCon one crucial question: How they would strip off their costumes if they had to get naked really, really fast? She found not but two of the most famous arachnid-based characters in the comic book world and asked them how they'd strip down in record time. Turns out that Spidey didn't just inherit radioactive powers, he also gained the ability of extreme sewing and the power to airbrush muscles onto his suit.
Annalee: "If you guys had to get out of those costumes really, really fast, how would you do it?"
Spidey: "You mean like, if the building was on fire? I always build secret escape hatches in here, so you can just pull and they're gone."
Spider-Woman: "Yeah, they come off in about five seconds." (We think she winked after that, but it's hard to tell behind those huge white eyecovers)
Spidey: "I mean, when you gotta to to the bathroom, you gotta go."


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This morning's video of the Toyota Camry driver who repeatedly brake checked a Mini Cooper was further proof that there is a sizable portion of the population who have no business being behind the wheel of a car. Ever.
That video was especially harrowing for me personally. A similar thing happened to me a couple years ago on a rural highway in Texas, and I can tell you that it's quite terrifying, even if you happen to be in a faster car than the other guy.
So that's our question today — what's the most dangerous thing a driver can do?
I'm sure you all have seen some pretty horrific examples of road rage, failure to pay attention, outright stupidity, ignorance of basic traffic rules, or some combination of those four things. Let's hear 'em in the comments below.
Maybe someone dangerous driver out there will read our answers and actually learn something. I kind of doubt it, though.
(QOTD is your chance to address the day's most pressing automotive questions and to experience the opinions of the insightful insiders, practicing pundits, and gleeful gearheads that make up the Jalopnik commentariat. If you've got a suggestion for a good Question of the Day, send an email to tips at jalopnik dot com.)
Photo credit Shutterstock


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The annual increase in pay for China's 163 million migrant workers almost halved in 2012, an official survey showed on Monday, signaling a looser labor market as economic growth slows.
The average monthly wage of migrant workers grew 11.8 percent in 2012 from the previous year to 2,290 yuan ($370). That marked a sharp slowdown from the annual 21.2 percent surge in 2011, according to the latest survey by the National Bureau of Statistics.
Continue Reading Below
The survey of China's rural labor force showed the number of migrants working outside their home towns grew 3 percent in 2012 from the previous year to 163.4 million. The pace eased from 3.4 percent in 2011.
The survey reinforced signs that China's export-oriented coastal provinces face growing competition from their inland counterparts as more migrants seek and find jobs closer to home.
The number of migrants working in their home provinces rose 3.6 percent in 2012 from the previous year, outpacing the 2.3 percent rise in the number of people working outside their home provinces.
The number of migrant workers in the Pearl River delta region facing Hong Kong - a major hub for exports - accounted for 19.8 percent of the total, down by 0.3 percentage points from the previous year.
The number of migrant workers in the Yangtze River delta area around Shanghai accounted for 22.6 percent of the national total last year, down 0.5 percentage points from 2011.
Provincial officials in the interior have rolled out the red carpet for foreign companies trying to escape higher costs in the more developed coastal areas.
Foxconn Technology Group, the world's largest contract electronics maker, has moved its main operations to such inland provinces as Henan and Shanxi.
China's overall rural workforce rose 3.9 percent in 2012 from the previous year to 262.6 million, the survey showed. The rate of expansion was 4.4 percent in 2011.
The bureau said the survey was conducted on a nationwide basis covering 200,000 migrant workers who had taken non-farm jobs for more than six months.
A seemingly endless stream of rural workers migrating to cities in search of better jobs and lives has underpinned China's economic rise in the past three decades.
But the pool of cheap labor is steadily drying up as the population ages, pushing up wages, which bodes well for the country's economic transformation.
The survey showed that the proportion of rural workers aged under 40 fell to 59.3 percent in 2012 from 70 percent in 2008.
Chinese leaders are planning to gradually free up China's rigid residence registration, or hukou, system to allow migrant workers to enjoy basic welfare services outside their official place of residence.
The reform will help speed up urbanization, seen as a vital driver to underpin economic growth, which slowed to a 13-year low of 7.8 percent in 2012.
Only 14.3 percent of migrant workers had pensions in 2012 and 16.9 percent had medical insurance, according to the survey. ($1 = 6.1316 yuan)
(Reporting by Kevin Yao; Editing by Robert Birsel)


text:
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Companies that submit case studies are often nominated for prestigous awards. Also, we often see opportunities for additional savings when we help you develop a case study.
Benefits for Others
Sharing your success story allows us to demonstrate the effectiveness of pollution prevention to:
Success stories are one of the best tools we have to encourage voluntary reductions from facilities and adoption of voluntary programs as an alternative to burdensome regulation.
Submission of Success Stories
To sumbit your success story, click Proceed below and complete the forms which follow. Success stories may include source reduction, energy and water conservation, recycling, waste exchange, reuse, reclamation, or treatment. We review your story and may request to make minor changes, but our goal is to present your story in your words. Upon approval, your story will be included in our Web site at: http://www.zerowastenetwork.com/success/index.cfm , which is searchable by waste, substance, industry, process, and equipment.
Attend a workshop and
The Zero Waste Network is one of eight Pollution Prevention Resource Exchange P2RxCenters , serving as a national network of regional information centers: NEWMOA (Northeast), WRRC (Southeast), GLRPPR (Great Lakes), ZeroWasteNet (Southwest), P2RIC (Plains), Peaks to Prairies (Mountain), WSPPN (Pacific Southwest), PPRC (Northwest). We are a proud member of the National Pollution Prevention Roundtable.


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With only one per cent of the world's oceans under protection, countries are far behind the 10 per cent target promised for 2010. A greater political will and a change in the way we manage our marine capital are needed now to preserve the Earth's oceans for generations to come.
This month Chile announced the setting up of a large marine reserve around Sala y Gómez island in the Pacific. However, current global plans for increasing the number of marine protected areas fall far short of what's needed to save the world's oceans, according to a new report from IUCN, The Nature Conservancy and the United Nations Environment Programme.
"Keeping our life support system healthy is what is at stake here and now," says Carl Gustaf Lundin, Head of IUCN's Marine and Polar Programme. "The creation of hope spots - special places in the ocean that need special protection - will prove that the world cares about two-thirds of our planet."
Launched today at the UN Convention for Biological Diversity, Global Ocean Protection: Current Trends and Future Opportunities - a new book by IUCN, The Nature Conservancy, UNEP and various other partners* - looks at the state of our oceans and offers solutions that will restore our marine resources while meeting future human demands. More than 30 leading conservation authors provide the best science and policy available to encourage countries to take actions that go beyond the establishment of individual protected areas.
A total of 5,880 marine protected areas exist today, mostly in coastal areas. However, current protected areas do not represent all regions, species and habitats that are important for conservation, and there are significant financial and human capacity restrictions. One way of achieving a dramatic improvement in marine conservation, while integrating food security, human welfare and health, is through proper management and spatial planning of the ocean, according to the publication.
Traditional management of marine resources is another way of responding to escalating threats to the health of oceans.
"Countries cannot afford to ignore the call for saving our oceans this time," says Manny Mori, President, Federal States of Micronesia. "Without effective protected areas at the village or community level, there can never be a successful global ocean protected area."
Carl Gustaf Lundin, Head, IUCN's Global Marine and Polar Programme, e [email protected]
Dan Laffoley, Marine Vice-Chair of IUCN's World Commission on Protected Areas,
e [email protected]
Francois Simard, Deputy Head and Senior Advisor for Fisheries, e[email protected]
Caitlyn Toropova, IUCN Marine Protected Areas Coordination Officer, e [email protected]
For more information or to set up interviews, please contact:
• Nicki Chadwick, IUCN Media Relations Officer, m +41 79 528 3486 (Swiss), +81 80 3462 3552 (Japan) e [email protected]
• Brian Thomson, IUCN Media Relations Manager, m +41 79 721 8326, e [email protected]
To read the full report visit: https://www.iucn.org/downloads/global_ocean_protection_report.pdf
*Additional partners include: WCMC, UNU-IAS, Agence des aires marines protégées and The Wildlife Conservation Society


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The dudes at Hella Bitter have been busy dudes. They've designed a cool looking kit that you–yes, YOU–can use for the purpose of making bitters at home. In this kit, you'd find two infusion blends–a citrus spice blend and an aromatic blend–plus infusion jars, dropper bottles, a funnel, and a mesh strainer.
This might not be the thing for diehard bitterheads; most of you probably already make your own shit already anyway. But it would be a great gift for someone just getting into cocktails, or if you yourself are just getting into cocktails, it would be a great self-gift to give yourself for being such an awesome self.
Kick it.


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I didn't have children so that I could have a crew of sous chefs ready and waiting to assist me with the day's menu or follow me around with a mop and broom cleaning up all my inevitable disasters. But as it turns out that is in fact one of the MANY perks of having a little brood.
Having just turned 3, Baron is actually becoming more of a help than a hindrance in the kitchen. Previously when agreeing to his assistance the piles of flour and sugar surrounding the bowl would be greater than those actually in the bowl. Fingers and tongues would graciously clean up the fallen sweet snow (actually this still happens but we're working on it – hopefully this habit will be kicked before he goes to work in an actual kitchen).
I have also figured out that, while I'm not cut out to be a homeschooling mom I do believe I can teach my children everything they need to know through baking. Think about it – math, chemistry, biology – all covered. While studying the origins of certain baked goods and desserts you'll learn history, geography and sociology. And then there are the underlying lessons learned such as patience, discipline & self-control (this comes through not eating ALL of the cookie dough before it has a chance to be baked) organization (which I am still working on) and sharing – in my opinion, the best part of cooking and baking.
With his apron on and fingers ready to help sample the sugar my sous chef was as excited as I was to assist with the day's lesson: Danish Dough.
We used two books as our guide, Baking & Pastry and The Art & Soul of Baking. Get ready because this is quite a process but like most (if not, all) things that are surrounded by layers of butter – it is well worth the work and wait.
Danish Dough (Detrempe)
from The Art & Soul of Baking
1/2 cup warm whole milk (4 oz.)
1 tsp. + 2 tbl. sugar (1 oz.)
1 tbl. instant yeast
2 cold large eggs
3/4 cup cold whole milk (6 oz.)
3 1/2 cups all-purpose flour – unbleached (17 1/2 oz.)
1 tsp. salt
Butter Block (Beurrage)
3 sticks cold unsalted butter (12 oz.) cubed
1/4 cup all-purpose flour – unbleached (1 1/4 oz.)
Making the dough:
Combine the warm milk, 1 tsp. sugar, and yeast. Let sit 10 minutes or until bubbly. If bubbles do not appear you might want to think about getting some new yeast. 🙂
In another bowl (if you have one you can use a stand mixer at this point) whisk together the cold milk, eggs and remaining 2 tbl. of sugar. Combine the yeast mixture with the egg mixture. In a separate medium bowl whisk the flour and salt until well blended. Add the flour mixture to the egg mixture stir to combine or use the hook attachment if using a stand mixer. Mix on low for 1 1/2 – 2 minutes – until the liquid is absorbed and a rough dough has formed. Lightly knead 3-5 times on a flour dusted surface. Do not overwork the dough – through the rolling out process the dough will be tough and elastic if it is overworked at this point. Wrap the dough in plastic then refrigerate for 30-60 minutes. If you are planning on resting the dough for longer, which is perfectly acceptable, simply wrap the dough loosely so there is room for it to expand.
Making the butter block:
Toss the butter with the flour. In a clean bowl of a stand mixer (or a good old fashioned wooden spoon and bowl – in which case prepare for a work out) with a paddle attachment add the butter and mix on low until the butter and flour have formed a smooth mass. You don't want to incorporated air at this point so keep the mixing slow. Form the butter on parchment or plastic wrap into a rough rectangle then cover and refrigerate.
Combining the Butter and Dough!!: This is exciting!
Lightly dust your work surface with flour. Roll the danish dough into a 15 by 12- inch rectangle with a short side parallel to the edge of your work surface. Pull or stretch the dough to form straight edges and sharp corners. Brush excess flour off of the dough – you don't want the dough to feel too sticky but you also don't want piles of flour on the surface. Visually divide the dough into 3 equal sections. Spread the cold but pliable butter over 2/3 of the dough (two of the three sections) leaving a 1/2 inch border around the edges of the buttered sections. Your fingers are your friends during this stage.
The letter fold – or three-fold
Gabe had all the cameras while we were making the dough so I drew pictures instead.
Fold the butter-less bottom third up over the center third of the dough. Then fold the top down over the center (like a letter!! – you know, the old fashioned kind we used to send in the mail). Pinch the seams along the bottom and sides of the dough. Use your rolling pin to help seal the sides. Nice work! You have now incorporated the butter with the dough and completed your first turn. If you butter feels a little warm and squishy, wrap and refrigerate the dough for an hour. If you are a speedy monkey and the dough is still cold, congratulations – you are now ready to graduate from the first turn and move on to the second.
Book Turn – or four-fold
Position the dough with the short side parallel to your work surface and the long fold on your left. Lightly dust the dough with flour and roll into a 20 by 12-inch rectangle. Fold the two short eges into the center of the dough leaving a 1/4 inch crevice between them. Square off the corners as best as you can. Now fold one side over the other – like you are closing a book. With a rolling pin gently roll over the dough to help seal the seams. Second turn is done! Wrap and refrigerate the dough for one hour – you and the dough both deserve a break.
Letter Fold, The II
Roll out the dough into a 20 by 12-inch rectangle again. Repeat the letter fold turn. Third turn is done and so is the Danish Dough!!
Cream Cheese Filling
adapted from The Art & Soul of Baking
8 oz. cream cheese (room temp.)
6 tbl. sugar (2 1/2 oz.)
1 large egg yolk
1 1/2 tbl. All purpose flour
1 tsp orange zest
1/2 tsp. salt
1 tsp. vanilla extract
Combine all the ingredients until smooth. A food processor is a great tool for this process. You can make the filling ahead and keep refrigerated for up to 5 days.
Roasted Strawberry Cream Cheese Danish
Divide the dough in half. This makes it easier to roll. Roll out the dough to 1/4 inch thickness. Cut the dough into any shape you want. Check out Joe Pastry for fantastic step-by-step images of creating many classic danish shapes.
Dollop 1 tbl. of cream cheese filling in the center (depending on which shape you choose) of each Danish and add a few pieces of quartered strawberries. Place completed danish on a baking sheet lined with parchment. Loosely cover with plastic wrap and let rise in a warm (but not to warm) spot until doubled in size. This should take about an hour. It should feel like a marshmallow to the touch.
Preheat the oven to 400*F and place the rack in the center. Freeze the Danish for 10 minutes (or the refrigerator for 15 minutes). With a pastry brush brush the danish with an egg wash (1 egg/1 yolk whisked together)
Bake one sheet at a time, rotating halfway through, for 14-16 minutes, until deep golden brown. Transfer to a cooling rack and immediately brush with apricot glaze (apricot jam gently warmed with a bit of water). Cool completely then dust with confectioner's sugar just before serving.
Phew. Still with me? What are you waiting for – get baking!!!
I know I know. This is quite an undertaking but good things come to those who mix, knead, wait, add butter, roll, wait, turn, roll, wait, turn, cut, shape, fill, wait, bake, wait, glaze, wait, dust, EAT!!
Seriously these pastries – while I know will improve the more proficient I get at the process – they tasted so heavenly. Buttery, tangy and sweet. The tri-fecta of all things delicious. If this sounds like too much work and you live in Seattle then hop in the car and go to Cafe Besalu – because THEY KNOW DANISH – and all things encased in butter.
If WE can do it so can you!!
PinkStripes overloads on Danish (if that's possible)
ImAFoodBlog – has a great how-to
TheKneadforBread – Danish with Lime Curd and Mascarpone?! Yes please!


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Status Report is included in our news feed.
December 22, 2010 |Volume 45, Number 13
More TOP SAFETY PICK winners as rollover and side protection improve
After struggling with tougher Top Safety Pick criteria a year ago, manufacturers have bounced back with more winning options.
Real-world data confirm results of side crash tests
Even with side airbags, drivers of vehicles with poor IIHS side ratings are 3 times as likely to die in a real-world left-side crash than drivers of vehicles that good ratings.
Wheego Whip is no match for barrier in side crash test
A recent side crash test of the 2010 electric Wheego Whip shows why low-speed vehicles like the Whip shouldn't share the road with regular traffic.
December 2, 2010 |Volume 45, Number 12
Bumper mismatch contributes to pricey damage
SUV and car bumpers don't line up with each other, and that leads to expensive damage in low-speed crashes.
Public seeks safer roads but still takes risks
Drivers sat texting while driving, speeding and running red lights are dangerous but admit to doing them anyway.
Stronger roofs help to reduce rollover injuries
New research from government researchers backs up the Institute's findings about the importance of roof strength in rollover crashes.
November 3, 2010 |Volume 45, Number 11
Aftermarket bumpers meeting new standard perform well in crashes
Tests show aftermarket parts can work well if they are correctly reverse-engineered.
Indiana city takes roundabout path to safer roads
Roundabouts outnumber traffic lights in Carmel, Ind. City officials credit the circular intersections with reducing crashes and improving efficiency.
Crash deaths continue to decline in U.S. amid recession
Traffic deaths have fallen to their lowest levels since 1950, new federal data show.
Large 15-passenger vans are subject to safety advisory
Two deadly crashes prompt a government advisory on 15-passenger vans.
September 28, 2010 |Volume 45, Number 10
State texting bans don't reduce crashes, insurance data show
A HLDI study of insurance claims finds that outlawing texting by drivers hasn't cut crashes.
Federal study finding no benefit from motorcycle antilocks is flawed
A federal study that failed to find a benefit of antilock braking systems on motorcycles relied on flawed methods. The government should set aside the findings.
Cost of crashes amounts to $500 per driver a year
Crash-related injuries cost the U.S. more than $99 billion a year in medical costs and lost wages and productivity, a study by the Centers for Disease Control and Prevention finds.
Double-red signal reduces crashes at crosswalks
A type of pedestrian-activated crosswalk signal known as a HAWK can reduce crashes at intersections where a full-fledged traffic signal isn't warranted, a recent study found.
September 8, 2010 |Volume 45, Number 9
More boosters earn top ratings for belt fit, but most still don't
Most boosters still don't provide consistently good belt fit, but there are a growing number of BEST BET options.
Need a booster? Question stumps many parents
Confusion persists among parents about the need for boosters and when children can leave them behind.
Top tethers on child restraints are used less than half the time
All front-facing child restraints have top tethers to keep them from tipping too far forward in crashes, but they are used only 43 percent of the time, an IIHS survey shows.
August 21, 2010 |Volume 45, Number 8
SidetrackedHot-button issues divert resources
Attention-grabbing issues such as vehicle defects and driver cellphone use can distract from highway safety initiatives with bigger life-saving potential.
Speed limiters in trucks would serve 2 purposes
The idea of requiring speed limiters on large trucks is getting new life because of its potential to conserve fuel.
Most new roof strength ratings are good
Automakers have been improving occupant protection in rollover crashes.
August 3, 2010 |Volume 45, Number 7
Parents favor strict rules for teen drivers and higher licensing age
Parents support older licensing ages for beginning drivers and stricter limits on night driving and passengers, a new survey finds.
Escalade leads list of highest theft claims
Theft rates for the Cadillac Escalade, Ford F-250 crew pickup, Infiniti G37, and Dodge Charger with a HEMI engine are 3 to 5 times as high as the average for all vehicles.
Belt use climbs in Maine after shift to primary law
Maine's upgrade to a primary safety belt law, combined with high-visibility enforcement, boosted belt use, a government study shows.
Crashes are leading cause of officers' deaths
The number of law enforcement officers killed in crashes increased 80 percent between 1980 and 2007.
June 19, 2010 |Volume 45, Number 6
Older drivers' crash rates decline unexpectedly
Crash rates among seniors are down, and one reason may be that they are limiting the amount and type of driving they do.
DWI offenders pick interlocks over house arrest
When the alternative is house arrest, more offenders choose interlocks, a study in New Mexico finds.
Drinking and related problems decline when alcohol costs more
Alcohol-impaired driving and other drinking-related problems decline when alcohol costs more, studies of tax policies show.
Agency rejects recorder rule for all big rigs
Electronic onboard recorders could reduce the problem of fatigued drivers, but a new federal rule requires the devices only for those with repeated rule violations.
Stability control reduces fatal crash risk by a third
Electronic stability control is one of the most effective technologies for preventing deadly crashes, especially single-vehicle rollovers, a new study confirms.
May 20, 2010 |Volume 45, Number 5
Low-speed vehicles aren't crashworthy, new tests show
More and more, low-speed vehicles and minitrucks are being allowed on public roads next to larger, faster-moving vehicles. New crash tests show why this is a terrible idea.
New estimates of benefits of crash avoidance features on passenger vehicles
Four existing crash avoidance features could prevent 1 of 3 fatal crashes if all vehicles had them.
Large trucks to benefit from technology designed to help prevent crashes
Four crash avoidance features could prevent or mitigate 1 of 4 large truck crashes, including 1 of 5 fatal ones.
April 15, 2010 |Volume 45, Number 4
Special issue: safety ratings
It's a safety marketplace, and consumers are buying
A safety marketplace has grown up around the world, thanks to the availability of vehicle crashworthiness ratings, which are widely consulted by consumers.
Consumers are paying attention to vehicle safety
A new IIHS poll shows safety is an important factor for vehicle buyers, second only to quality and reliability.
March 31, 2010 |Volume 45, Number 3
Riding is risky funMotorcyclist deaths increase
More people are riding motorcycles, and more are dying in crashes. An IIHS survey provides a picture of who is driving and looks at their views on helmets, helmet laws and antilock brakes.
Helmet laws that apply to all riders cut risk of motorcycle injury
Motorcyclists in states that require helmets are less likely to file injury claims after collisions than those in states without such laws, a HLDI study finds.
Antilock brakes on motorcycles prevent crashes
Two studies provide more evidence that antilock brakes reduce fatal crash risk and insurance losses.
Training fails to reduce crash risk of young riders
State requirements that young motorcycle riders take a training course before being licensed don't reduce crashes, a new analysis of insurance claims shows.
New Jersey leads way with strong teen licensing laws
Policies that require teens to wait until they're 17 to get their licenses and then adhere to tough restrictions once they do are cutting crash rates in New Jersey.
February 27, 2010 |Volume 45, Number 2
Special issue: phoning while driving
Patterns of phone use and crashes don't match
Phone use by drivers is up, but crashes aren't. More research is needed to figure out why this risky practice hasn't affected crash rates.
Drivers phone and text even at riskiest times
An Institute survey finds that large numbers of drivers talk on the phone and text even in challenging driving conditions.
Phone use bans aren't producing expected benefit
Collision claims don't decrease after states enact driver cellphone bans, a new HLDI study finds.
High-tech options to curb distraction
Technology can be distracting, but some forms can help prevent distraction.
February 6, 2010 |Volume 45, Number 1
Belted drivers appear less protected under new front airbag standards
New frontal airbag standards appear to decrease protection of belted occupants, an IIHS study shows.
Drinking continues to decline among weekend drivers
The latest national roadside survey finds alcohol-impaired driving has continued to decline, with 2.2 percent of drivers having blood alcohol concentrations of 0.08 percent or more.
NHTSA examines fatal crash factors
A federal study suggests the need for improved vehicle designs and advanced restraints, as people continue to die in crashes despite airbags and safety belts.
New safety ratings for small pickups
The Nissan Frontier has the strongest roof and the Chevrolet Colorado the weakest among five 2010 small pickup trucks recently evaluated for rollover protection.
©1996-2018, Insurance Institute for Highway Safety, Highway Loss Data Institute | www.iihs.org
IIHS-HLDI in the Classroom
An educational resource for students and teachers


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Froissart's Chronicles
"Froissart's Chronicles" describe many of the events in England and Western Europe during the period from the accession of Edward III in 1327 to the death of Richard II in 1400; including the first years of the Hundred Years War, the Black Death, the Peasants Revolt, and descriptions of the glittering courts and major personalities of that age.
Sir John Froissart lived from about 1338 to 1410. He is considered one of the first journalists. He travelled widely in both England and the Continent and at one stage was secretary to Queen Philippa of England. He knew Geoffrey Chaucer. He spoke to eye witnesses of the events he chronicled, including the great actions at Sluys, Crecy, Poitiers and Calais, and the commerce and diplomacy of the era. His works were first translated into English in 1523-25, and it is through them that we can "get the feel" of the "age of chivalry".
Reference: "Froissart's Chronicles" (of course)


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Two men are under arrest in connection with the murder of Odin Lloyd, and police are searching for a third one.
Per multiple reports, the authorities have issued an alert indicating that Ernest Wallace a/k/a Bo Fish is wanted on charges of accessory after the fact.
Wallace, 41 and having a "very heavy build," was last seen driving a silver/gray Chrysler 300. He is considered armed and dangerous.
The term "accessory after the fact" implies that Wallace was not directly involved with the murder of Lloyd, but that he had a role in assisting with the concealment of the crime.
If so, that expands the universe of potential suspects to four — Aaron Hernandez, Wallace, and the two men who allegedly were in the car with Hernandez and Lloyd in the moments before Lloyd was killed. One of those two men is believed to be Carlos Ortiz, who was arrested on Wednesday at the Bristol, Connecticut home of Hernandez's uncle.


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US Senate candidates resume TV ads Lynch focuses spot on Marathon attacks
The Democratic candidates for US Senate resumed TV advertising on Tuesday after a week's silence observed out of deference to the victims of the Boston Marathon bombings.
US Representative Stephen F. Lynch of South Boston launched a TV ad focused exclusively on the tragedy and avoiding any mention of the campaign except for the required language approving the ad's message.
"My heart goes out to those affected by this unthinkable terrorist attack,'' he says, speaking directly to the camera. "I want to thank those whose actions saved lives and the police whose heroic efforts brought it all to an end.''
"In the face of this tragedy, our city and state offered a stunning example of the strength of the human spirit,'' Lynch adds. "We hold in our hearts those we lost but we will get through this together and work toward a brighter day.''
His opponent in Tuesday's Democratic primary for US Senate, fellow US Representative Edward J. Markey of Malden, also resumed TV advertising on Tuesday. His campaign returned to circulation an existing ad focusing on women's issues, saying he cosponsored an equal pay for equal work measure, helped force insurance companies to cover mammograms, and has a strong record of supporting abortion rights.
Democratic campaign activity had been suspended after the transformative events of Marathon Monday, when three people were killed and 264 injured in a terrorist attack along the marathon route. The Democrats resumed debates Monday and Tuesday.
The three candidates seeking the Republican nomination resumed campaigning earlier and have been vocal in recent days on the terrorist attacks. Michael J. Sullivan, a former acting director of the Bureau of Alcohol, Tobacco, Firearms and Explosives, has been quoted as an expert on the attacks. Gabriel E. Gomez, a Cohasset businessman and former Navy SEAL, ran the marathon and finished just about 10 minutes before the blasts. He said last week that the surviving suspect should be tried as an enemy combatant.
And state Representative Daniel B. Winslow joined lawmakers Tuesday who cited the dangers that law enforcement officials faced following the attacks, as they chased down the suspects, to call for a renewal of the death penalty in Massachusetts for those who kill police.
Still, Republicans have been accusing Democrats of using the marathon tragedy for political gain, citing a letter sent out by the Democratic National Committee aiming to thank Boston emergency responders. Those who signed the letter could then be tapped for Democratic solicitations of donations and support, Republicans charged.
The Massachusetts Republican Party has unsuccessfully pushed Markey to renounce the DNC letter and its spokesman on Tuesday seized upon Lynch's ad, suggesting both Democrats are going too far.
"With Ed Markey refusing to denounce his party's use of the marathon tragedy for political gain and Lynch's latest ad, it is clear these career politicians have either lost touch with Massachusetts or are willing to sink to new lows for a promotion,'' MassGOP spokesman Tim Buckley said in a statement.
The Democratic candidates are elected officials who were often among those regularly appearing at televised press conferences following the attack. Lynch knows the Dorchester family hard-hit by the tragedy; Lynch's wife worked with Denise Richard, who was injured in the blast with her daughter and whose 8-year-old son, Martin, was killed.
Lynch also has history with campaigning in the face of disaster: He first won the Democratic nomination to his seat in the House during a special election that coincided with the terrorist attacks in New York of Sept. 11, 2001 — a day so unpredictable that the Secretary of State briefly called for cancelling the special election.


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Prinzzess is a Adult Model from United States. She was born in Florida on February 6, 1985. She is listed on FreeOnes since 2004 and is currently ranked 1212th place. She currently has 300 gallery links and 10 videos in her own FreeOnes section.
Our records show that Prinzzess is currently active which means she is still making movies, doing live shows and/or doing photo shoots.


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