International -- Readers Report
Let's Not Whitewash the Indonesian Cabinet (int'l edition)
I was surprised by your coverage of Indonesia's recent cabinet reshuffle in "Indonesia's new lineup" (International Outlook, Sept. 4). You wrote that the new cabinet was "welcomed by analysts and investors as a good first step." If that were true, why did the local stock market and currency, the rupiah, each lose more than 4% on the day the new cabinet was announced?
You also wrote that the "promising new cabinet" largely resulted from a "compromise deal" between President Abdurrahman Wahid and Vice-President Megawati Sukarnoputri. But if such a compromise emerged, why did no members of the Vice-President's party, the PDI-P, receive key cabinet positions? And why did Megawati refuse to even be in the same room with President Wahid when he announced the new cabinet members? He had to provide excuses, saying she had gone to have a bath.
SingaporeReturn to top
The Wrong Way to Wipe Out Poverty (int'l edition)
In "Compassionate conservatism: Look beyond the label" (Economic Viewpoint, Sept. 4), Robert J. Barro seems to take a view that is less than objective. In the first place, he defines conservatism in terms of free markets, property rights, and limited government--and then he takes offense on the grounds that it might be considered to lack compassion.
Free markets are not an element of social policy: They are economic and therefore are not expected to have a conscience. It is but one tool with which a nation attempts to manage its environment.
As an example, there are many countries in the world where the markets can be relatively free but the people are not. In these cases, economic policy and social policy are widely disparate. Free markets require some controls, including those as simple as antitrust laws and enforcement.
When someone wants to temper pure capitalism, especially in a country where the government takes a smaller role in social issues, such as the U.S., it should be applauded, especially when it comes from the side that is typically less socially minded.
For Barro to champion conservatism as capitalism and then to intimate that capitalism is somehow perfect is flawed logic. Then, he changes the definition of conservatism from free markets to status quo. It seems he is looking for reasons to dislike the phrase, rather than evaluating it objectively.
I am not sure what Barro intends to convey to the readers, but he compares two determinant conditions as means to reduce poverty. Problem is that both of them do not define the outcome. Their comparison is pointless.
There is only one determinant in reducing poverty with a predictable outcome: increase of earnings for the lower income group. Comparing other alternatives is a domain of politics.
Barro's assertion seems unsubstantiated. Affecting a measure of variability like the standard deviation may in some cases be more important and more feasible than affecting the average income of a population. The phrase "lowering the degree of inequality" attempts to address this problem. To simplify, suppose that in a population A, there are 10 people, in which one person has a yearly income of $910,000 and the other 9 people have yearly incomes of $10,000 each. In another population B, also with 10 people, each person has a yearly income of $100,000. The average income in both A and B is $100,000. Supposing that the poverty line can be drawn at $17,000, it is obvious that A and B are very different. In A, 90% of the population is below the poverty line. Controlling the standard deviation in A seems to me just as important in reducing poverty.
New YorkReturn to top