Blitzkrieg!

For Thomas Piketty it's shaping up to be deja vu all 1940 again;

In conclusion, Piketty’s “second fundamental law of capitalism” and the central theme of his book—that when growth goes to zero, the capital-income share increases dramatically—appear very difficult to justify, at least in light of our view of how savings decisions are made. These views are based, first, on the fact that we find a 100% gross saving rate—the implication of Piketty’s model when growth approaches zero—implausible; and, second, on the large empirical literature studying individual consumption behavior. We also take a first look at U.S. postwar data and find, roughly speaking, that the optimal-saving model—thatis, the model used in the applied microeconomics literature and by Cass and Koopmans in a growth context—seems to fit the data the best, somewhat better than the textbook Solow model. Piketty’s model, on the other hand, does not appear consistent with this data. Equipped with the models we thus deem better capable of describing actual saving behavior, we then revisit Piketty’s main concern: the evolution of inequality in the 21st century. Using these models as a basis for prediction, we robustly find very modest effects of a declining growth rate on the capital-output ratio, and hence on inequality. Thus, we find Piketty’s second law quite misleading, and certainly not fundamental; we in fact think that the fundamental causes of wealth inequality are to be found elsewhere.

That's two Yalies--Per Krussell and Tony Smith--saying, the scholarly equivalent of, Don't bring that weak,smelly, cheese in here! 

Update; A correspondent alerts us to another paper from Krussell et al., that also has some interesting things to say about capital;

...we suggest...that the Chamley–Judd prescription that “optimal taxes on capital income should be zero in the long run” could be sharpened to “. . . should benegative . . . ,”

I.e. use taxation to limit consumers' temptation to overconsume in the present.

Good for a girl

Jeopardy finally has a female phenom to show off;

 Julia Collins can count another "Jeopardy!" victory and another milestone.

The TV game show said Collins won her 20th game Friday, putting her alone in second place for most consecutive non-tournament victories.

....The top "Jeopardy!" player is Ken Jennings, who won 74 straight games in season 21 for a total of $2.5 million in prize money [Julia has amassed about $420,000].

The 31-year-old Collins already has set a record as the winningest female "Jeopardy!" contestant ever, both in money and number of games.

So, if women are as smart as men, why aren't there more of them winning big (and getting rich) on Jeopardy?

The FLUBA Committee on Anything You Can Do... notes that last week [Feb. 2005] the television game show, Jeopardy!, initiated its Ultimate Tournament of Champions to see how last year's millionaire champion Ken Jennings would compare to previous stars. 144 former champions in all will compete.

Fewer than 20% of them appear to be female according to the roster on the show's website.

And, of the seeded former champions (such as Chuck Forest and Million Dollar Master Brad Rutter) only one of nine is a woman. The Tournament's ultimate winner will take home over $2,000,000.

In the recently concluded Battle of the Decades tournament, only 3 of 15 semi-finalists were women, while none of the three finalists were female.

What's Larry Summers up to these days?

Nobody goes there anymore

It's too awful, says the St. Petersburg Times;

TripAdvisor, the second most popular travel website, has recently blasted Russia on several counts of being the world's worst travel destination in its yearly Cities Survey.

This is not an overt move by a TripAdvisor editorial team to manipulate a perspective in light of East-West tensions: Rather, this represents organic, grassroots condemnation from a pool of 54,000 TripAdvisor survey respondents from around the globe.

Of the 37 cities on the list, Moscow finished third to last in terms of "best overall experience." Across 16 categories, there were no placements in the top three of any category. There were nine instances of bottom three placement. Moscow, apparently, is the absolute worst for: helpful locals, taxi services and taxi drivers, value for money and hotels.

And that's not to mention annexing neighboring regions like Crimea.

Cuando el fallo no es una opción

You're in Madrid, living in the past and stuck with ugly old storefronts;

Blas de la Fuente bought the premises in 1999; the façade was as it is at present, while the interior was empty. Since then he has applied for planning permission five times (each application costing €5,000) to refurbish the premises, protecting whatever needs to be protected, and that each time, his application has been denied. “The problem is that they don’t know what was originally here: there are some references to a counter, some beams, but they don’t know,” he says. City Hall says that no license has been granted and that work undertaken to the premises has been noted as not complying with municipal ordinances. De la Fuente says he has even considered giving the property away.

Capitalism is a profit and loss system, and the failures are as important as the successes. When you can't venture, lose, and move on, you get what Madrid has;

...in 1997, Madrid City Hall published a catalogue of around 1,500 historic store fronts and signage in the capital with the aim of protecting this unique aspect of the city’s commercial heritage. Even at the time, some had already gone, such as the former grocery store on the corner of Monteleón street in the Malasaña neighborhood; others supposedly protected by municipal legislation have since disappeared through accident or design.

A check of around 50 of the protected shop fronts reveals that almost half have been damaged, removed, or modified in some way. Some have been changed with the approval of City Hall, but still remain in its catalogue... some have been vandalized or fallen into disrepair following the closure of the premises, lost for ever. But above all, the problem seems to be that work has been carried out, or store fronts and signage have been removed, without the permission of the relevant authority, which is City Hall’s Agency for the Management and Opening of Economic Activities (AGLA).

At least that is what City Hall says. Furthermore, any changes to a listed building requires the permission of the capital’s two heritage commissions, which include a member of the capital’s College of Architects. 

Which might explain why Spain is not recovering from the recession of 2008, after all these years. To get anywhere you have to break the law.

Be as rich as Rockefeller

By wasting not, and feeding the puppies;

...individual [craft] breweries may use tractor trailer loads — or roughly 50,000 pounds — of grain every day to brew tens of thousands of gallons of beer. That grain is soaked in warm water, which extracts starch that turns into fermentable sugars. Once that's done, the grain is separated and discarded, and the brewing process continues.

Because of the sheer amount of spent grain in beer-making, the majority of it ends up on farms for animal feed or compost. Federal officials last month backed off proposed livestock feed rules that beer makers feared would cost $13.6 million per brewery if they wanted to sell grain left from making beer to ranchers and dairy farmers.

But there's no shortage of ways brewers are disposing of the fruits of the fruits of their labor.

Back in the 19th century John D. Rockefeller and Henry Flagler were refining crude oil pumped from under the ground in Pennsylvania, in their refinery in Cleveland. Their major product was kerosene, used in lighting homes. But they had a 'waste product' too; eventually known as 'gasoline' that became useful to the customers of the Henry Fords of the world. Another 19th century waste product is today known as Vaseline petroleum jelly.

So, grab your coat, get your hat, and get your puppy to sit up;

In brewery-heavy San Diego, Green Flash Brewing Co., Stone Brewing Co., Societe Brewing Co. and others supply their spent grain to David Crane, a home brewer whose small company makes "Doggie Beer Bones" out of the beer leftovers mixed with peanut butter, barley flour, eggs and water. They're sold in breweries and pet stores nationwide and on the Internet. But don't worry, Fido, won't get drunk off of them — they don't contain alcohol or hops, which are harmful to dogs.

It's news; dogs exploit human weakness!

Pobre Venezuela

Even El País doesn't want to defend Maduroism;

April 19 marked a year since President Nicolás Maduro assumed power in Venezuela, and the figures would not make his mentor Hugo Chávez proud.

Annual inflation was 56.2%, the highest in the entire Bolivarian period, the homicide rate keeps growing unchecked, and there are shortages of consumer products.

Last weekend, the INE national statistics office added another layer of bad news: the extreme poverty rate rose from 7.1% in the second quarter of 2012 to 9.8% in the same period of 2013. This means that 737,364 Venezuelans slid into extreme poverty in that period, joining a group of nearly 2.8 million citizens in a country of 30 million.

But does that mean they can't find something to complain about elsewhere (next door to Venezuela)? ¡Sí, se puede!;

[Columbians] live in a country whose economy has grown at an annual average rate of 4.7 percent in the last four years, where foreign direct investment grew eight percent in 2013 from a year earlier to reach nearly $16.8 billion, and where inflation is a mere 2.3 percent. Even unemployment, which was 9.6 percent last year, is going down.

The International Monetary Fund (IMF) has just praised the macroeconomic orthodoxy of Latin America’s fourth largest economy, a place where the middle class has grown to 27 percent (still low compared with Chile or Mexico) and where, as President Juan Manuel Santos likes to point out, 2.5 million people have been lifted out of poverty in the last four years.

But while all this is happening, one thing has barely changed at all: inequality. In Colombia, the gap between rich and poor is among the biggest in Latin America and in the world. 

Round up the usual suspect;

Juliana Londoño, a Colombian PhD student at Berkeley University in California, has put numbers to this phenomenon: the wealthiest one percent own 20 percent of total wealth.

“That is one of the highest concentrations, as high as in the United States,” she explains. Londoño’s findings on Colombia were included in a book that has recently shaken up the public and scholarly debate, Capital in the 21st Century, by the French economist Thomas Piketty. 

Which book claims the solution is to tax the rich; to destroy them in the name of fighting for the poor. Which has never improved their lot anywhere it's been tried.

Where have you gone, Mickey Mantle?

A lushly nation turns its eyes onto the breakfast of champions;

Last month, James "The Beast" Nielsen honored the 60th anniversary of the first sub-four-minute mile run by shattering another hallowed record long thought unbreakable: the five-minute "beer mile."

Since its origin on college campuses in the late 1980s, the beer mile has grown into an underground phenomenon. Thousands of people, including some professional athletes, have sought to be the fastest in the world at chugging a 12-ounce beer, running one lap, then repeating the uncomfortable, belch-heavy process three more times. Adherents call it the most "glorified" of the "digestive athletics"—a realm that includes competitive eating contests—but it has remained mostly in the shadows.

Mr. Nielsen's record-setting 4:57 run catapulted the obscure sport onto a larger stage with more than one million views of a YouTube video of his feat. The first world championship is now being planned for this year. Mr. Nielsen, a 34-year-old sales executive who ran competitively in college, says he has been approached with endorsement offers from apparel and beer companies.

What about the Beer Drinkers' Hall of Fame?

Palate cleanser

More on the Piketty Fad from our favorite Spanish (or Catalan, as he prefers) economist;

I have already explained that the data provided by Piketty do not demonstrate in any way that inequalities of wealth and income increase long-term (only partly, since 1980) and much less that r> g implies the existence of dynasties that are perpetuated through inheritance of estates.

But here I would like to comment on a much more fundamental problem: Piketty never convincingly explains why economic inequalities are important and why they represent the seeds of the destruction of capitalism. Sometimes Piketty uses the expression, "it is clear that inequalities are socially harmful or unsustainable", and sometimes he says, "inequalities generate social unrest that will end up leading to political instability (peaceful or violent) that is going to end capitalism".  

The first is not an argument but rather an opinion. And the second is based on some kind of vague political theory. To be convincing, it needs development. For example, let's accept for a moment that economic inequalities generate social unrest. The question is: How does economic inequality create social unrest in France?

Is it the inequality in France? How about global inequalities? I say this because Piketty only analyzes inequalities WITHIN rich countries: within France, within the UK, within the United States. But global inequalities have plummeted since 1970 as the poorest and most populous countries worldwide have grown at a much faster rate, which has reduced inequalities between countries and has brought down the global inequalities. 

I myself analyzed this phenomenon called "The Great Convergence" in an article in 2002 (7), a phenomenon that the same Piketty has accepted as real and true on page 15 of his book.

The very fact that the French economist is so much preoccupied about the wealth of Bill Gates and the super-rich Americans indicates that, he has in his mind, a political theory in which the wealth of the rich in other countries matter for political stability  of France.  However, if what matters is the overall inequality, then one has to admit that the inequalities in the world not only have not increased since 1980 but have fallen significantly.

Logically, we will not know what implications the evolution of inequality has until Piketty shows us a political theory of social unrest which demonstrates inequality within a country generating political instability, and not global inequalities.

Understanding the determinants of instability or why inequalities are bad also matter in setting economic policies to solve the "problem." For example, a tax on wealth recommended by Piketty is no solution to a problem of inequality between countries. 

Moreover, this tax can end up hurting growth of poor countries and, therefore, can in the process, of that desired convergence to the richer world. 

To accelerate the convergence, and growth for the poor, the weapon needed is education: a good educational system incorporating Africa (still the world's most poor continent) into the global labor market will accelerate global growth rates and reduce still more global inequalities.

From the Spanish, we again add.

Essence of Eurocracy

Brussels allergic to sex goddesses;

El perfume sin el que Marilyn Monroe no podía dormir -decía que siempre se echaba dos gotas- y 'Miss Dior', dos de los perfumes más populares del mundo, contienen contienen componentes que podrían ser prohibidos bajo las nuevas reglas europeas....

We make that out to say that Chanel Number 5, without which Marilyn Monroe claimed she could not sleep (two drops always), and Miss Dior, two of the most popular perfumes in the world are in danger of being ordered to reformulate by the latest in European regulation. That's because of something called; the European Union 's Scientific Advisory Committee on Consumer Safety issues (SCCS).

SCCS is out to protect the 3% of Europeans who are allergic to substances like citral--found in lemons and oranges--which make up part of the formula for perfumes.

"If we ban citral in perfumes , of which some elements are allergens, we must ban orange juice . It's absurd. Should not ban nature , just learn to live with it " , said Frederic Malle, founder of the company Parfums Frédéric Malle .

Well, he would say that, Non?

Our breakfast with Xavier

Everyone has fun ridiculing the French, but no one does it as well (and as courteously) as Columbia's Xavier Sala y Martin (translated from Spanish);

Inequality "r> g" is the key to Piketty's book.... "When the rate of return on capital [r] is higher than the growth rate of the economy [g], logic dictates that inherited wealth is growing faster than GDP and personal income" (p. 25).

And that is the fundamental message of the book: as the rate of return on capital is higher than the growth rate of the economy (and therefore wages), the "capitalists" obtained an increasing share of the pie, leaving inheritance to their children, who therefore, are born rich. The return of inherited wealth that they will get will also be higher than the growth rate .... And so dynasties; the rich getting richer relative to workers, and capital has become increasingly large relative to the rest of the economy. 

This constant increase in inequality is a major problem for capitalism because it generates political instability: per Piketty, the mass of poor workers will end up rebelling against the rich minority, and through democracy or violence will destroy the system. That is the "central contradiction of capitalism". A contradiction that will ultimately lead to self-destruction. 

To fix the problem requires taxing inheritances and capital, to break the dynasties of billionaires and their possibly dominating the economy. Everything from the finding that the rate of return on capital is higher than the growth rate of the economy. Everything from "r> g".

This logic of Piketty, however, has a little problem: IT IS FALSE! 

Let the rate of return on capital, r, be greater than the growth rate of the economy, g.  Far from being a "contradiction of capitalism" this is a condition that economists have dubbed "dynamic efficiency". If an economy has "r <g", it is inefficient in the sense that it has saved too much. That is, if "r <g", the current generation could increase their consumption (reducing their savings), with no future generations being forced to suffer. In this case the savings would be inefficiently large so it would be socially desirable to be reduced until "r> g." And that would be true in a capitalist economy and a planned economy. so, the inequality "r> g" isn't the  "central contradiction of capitalism", it is an aberration.

Moreover, contrary to the claims of Piketty, the fact that r is greater than g implies neither the rich spend their savings on to their children, nor that wealth grows faster than GDP, or that rich dynasties are increasingly richer, or that social inequalities grow. 

Imagine, for example, a world in which individuals work when young and retire when old. Knowing that someday they will retire, so when young, save money and invest. When they are old they use their savings (and the rate of return on their savings) to survive. It's no longer a dollar inheritance to their children if they die with nothing. 

The children do the same as their parents and thus, generation after generation too. All economists know that in this world of "overlapping generations" the rate of return on capital, r, may be higher, exceeding the growth rate, g. If the economy is dynamically efficient, then it is true that "r> g" and yet, no one gets an inheritance! 

Unlike what Piketty says, logic does not dictate in any way, that "r> g" implies that inherited wealth grows faster than GDP, partly because inherited wealth can be exactly zero in worlds where "r> g"! 

In the real world, of course, the rich do not consume everything they have and leave part of their wealth in inheritance to their children. It is also true that for many of them an important part of that wealth is spent on lavish parties, boats, airplanes, luxury travel or philanthropic actions such as Bill Gates or Warren Buffet. 

Furthermore, unlike what happened in ancient times, where all the wealth went to a single heir, now the property of the rich is divided between many children (often from different marriages) so that from a very rich grandfather You can have very poor grandchildren. It is well known; the saying that the grandfather created a fortune, his children extend the fortune,  and the grandchildren squandered same. 

The world could have "r> g" and, in turn, be filled with families whose grandparents create fortunes , the grown children and grandchildren destroy them. And contrary to what Piketty says, in that world there would not be more and more rich and powerful dynasties. However, it would be true that "r> g"!

!Me estás matando!

We enjoy the comedy stylings of Colombia's Xavier Sala y Martin (translated from Spanish);

If the most famous thesis of [Thomas] Piketty is true and the rate of return on capital is higher than the growth rate of the economy (r > g), it follows that we should have a capitalized social security system . I.e., with the current system of PAYGO in which young workers pay taxes on their wages to supply the pensions of retirees, the rate of return they get is the growth rate of wages, ie, ‘g’. If, on the contrary, we take the money wages of those younger workers and we invested it in capital would get a return ‘r’. 

If, as Piketty says, “r > g “, retirees could enjoy a much higher pension if the pension system was fully funded! Which is what I argued to the union leader and former leader of ICV, Joan Coscubiela in a debate on the future of work, we did on TV3 [in Spain] . He said the return on capital was much higher than the growth rate of wages and that meant that capital “ate” an increasing share of GDP. I warned him to be careful of that argument because the immediate implication was that the model of a fully funded pension is superior to PAYGO. I got the impression that Coscubiela did not understand the contradiction of his own argument, but Thomas Piketty does understand that . 

He devotes an entire section of his book to discussing pensions. Recognizing the validity of the argument, Piketty explains that now it is too late to change the system because at the time of the transition we would have a generation that has to pay twice [My note; that's not a valid argument, as Milton Friedman has demonstrated]. But that argument is not valid for emerging countries that do not yet have a pension system. I wonder if Piketty (and Coscubiela) advocate the introduction of a capitalized private pension scheme for poor countries that do not have social security. 

In fact, the argument is not valid for the rich countries: if truly the return of capital is so superior to wage growth, you could take some of the excess return, save it and grow it until you have enough money to make the transition . Why not defend that, Piketty! 

Then there is a second reason for not wanting a funded [capitalized] system: the return on capital is higher, true, but it is also vastly more volatile and uncertain! That is, after writing an entire book on the great bargain it represents for the rich to have capital, at the end of the book he confesses that some of the higher return is compensation for taking higher risk. A risk that Piketty does not want workers to take. Curiously, Piketty does not analyze the risk assumed by capitalists throughout the book. Piketty speaks of the rate of return of capital as an overpayment to a class of citizens who do little more than suck the blood of the workers. At the moment of truth, however, Piketty confesses that, at least in part, that “r” rewards risk taking by those who invest. It’s one thing simply to get a return for exploiting your fellow citizens, and quite another to reap a reward for taking a risk that the rest of society (and Piketty most of all!) is not willing to take.

This lack of rigor in analyzing the relationship between return and risk of capital is one of the major shortcomings of the book.

Not that that exhausted the possibilities for mirth in Capital in the Twenty-First Century. As we hope to demonstrate in the not so distant future.

Indian givers and takers

Opportunity knocks for the new leader of 1.2 billion people;

Dozens of small shops [kirana] line the streets of Worli, a township in the southern part of India's commercial hub of Mumbai. Each shop is less than 5 meters square, but they sell a wide range of daily necessities, from grains and sweets to detergent and soap.

The kirana are over 90% of India's retailers, because Indian law restricts the kinds of large stores the rest of the world enjoys, from entering and competing for the consumers' business.

 Outgoing Prime Minister Manmohan Singh proposed in September 2012 allowing foreign multi-brand retailers, including supermarkets, to enter the Indian market. But the proposal was fiercely opposed by small and midsize business operators, mainly kirana owners, who make up the key supporters of Singh's Indian National Congress party. The government responded by setting stiff requirements for foreign retailers, such as procuring a certain amount of products from local suppliers, that have effectively closed the door to India's retail market.

So the new broom will sweep away the old ways?

The Bharatiya Janata Party, which enjoyed a landslide victory in the recent general election, has promised sweeping economic reform. But even though [BJP leader Narendra] Modi told The Nikkei last November he would not oppose foreign retailers entering India, the BJP's manifesto released in April made it clear that his party is against the idea. 

What will it be, the power of concentrated, focused, entrenched  special interests, or Wal-Mart with its concern for the well-being of literally a billion Indians?

Opening the door to foreign retailers would bring far-reaching benefits. An estimated 20-40% of vegetables and other perishables in India never make it to market because they spoil during distribution. Major foreign operators can bring the infrastructure and know-how for refrigerated logistics that India lacks. Additionally, middle-income consumers are no longer satisfied with the selection available at kirana shops. Some industry sources say the BJP's opposition to foreign retailers was merely a campaign tactic and the party will change its position once it assumes power.

Foreign retailers are keen to gain a foothold in India's market of 1.2 billion people. British supermarket operator Tesco submitted to the Indian government an investment plan for retail operations last December. Wal-Mart Stores announced in April a plan to expand its wholesale business. Scott Price, president and CEO of Walmart Asia, says he is excited about his company's growth plans in India.

The Singh government considered the opening-up of the general merchandise market the centerpiece of its economic reform initiative, but it failed to make that happen. Retail market liberalization will test the Modi government's commitment to economic reforms. 

Then there is the Indian railroad;

India's railway system dates back to 1853, during the British colonial period. Today, state-owned Indian Railways employs 1.36 million people and operates 12,000 passenger and 7,000 cargo services daily over a railroad network stretching 64,000km.

....Economic losses owing to inadequate transportation infrastructure, including fragile rail and road systems, exceed 2 trillion rupees each year,  according to the Associated Chambers of Commerce and Industry of India. The organization warns that without action, those annual losses will balloon to 7 trillion rupees by 2020. 

And electricity;

  Andrew Brandler, former CEO of Hong Kong's largest electricity company, CLP Holdings, does not mince words when describing the power business in India: "Frankly, the country is in a mess when it comes to fuel supply, not only coal but gas."

....Brandler, who now is a nonexecutive director, lashed out at the Indian energy industry at press conferences in Hong Kong, blaming the underutilization on the "total inability of Coal India and the Indian government on full allocation of coal." His criticism places the blame directly on the state-owned coal giant and the government for failing to live up to its promise of providing the right amount and quality of coal. Things are starting to improve now that CLP has been given permission to use imported coal to offset Coal India's late deliveries, but the plant is still not at full capacity. 

Don't forget labor;

 Over 40 laws govern different aspects of labor, including regulations implemented before India gained its independence from Britain in 1947. The Industrial Disputes Act that came into force in the same year as independence requires companies with 100 employees or more to obtain government approval for withdrawing from local operations and closing down offices. The purpose of the legislation is to ensure continuity of employment, but it is very difficult to be granted permission to close such a business. This law often works to dissuade companies from entering the Indian market. 

Modi has identified the development of manufacturing industries as the core of his growth strategy. However, the country's labor regulations and practices may become the biggest obstacle for the new Modi government in pushing through much-needed economic reform. 

Should be interesting times.

Low bridge loan

Chinese investors wanted to select from Large Infrastructure Projects, but the State said, No tickee, no thankee. Now the anti-discrimination brigade gets in the act;

Immigration rules meant to encourage investment in the United States allow wealthy foreigners to essentially buy their way into legal residency through large investments [over $500,000] in American companies or public projects.

....the investors are put on track to obtain citizenship or permanent legal status in the United States. Initially awarded the confusingly titled “conditional permanent residence” status for two years, investors are in an optimal position to petition for a green card and stay in the county indefinitely.

The Chinese investors, working through a firm titled Access the USA, bought $48 million in bonds, in 2011, to fund the first stage of a bridge spanning Lake Washington.

Having made the initial buy, Access the USA was preparing to make the largest single purchase during a second bond sale in May 2012. The firm created funds for the purchase, and was prepared to buy $143 million in state debt when the underwriters [Citibank] stopped working with Access the USA.

....According to the lawsuit, state Treasurer’s Office staff initially denied interfering with the sale but were later found to have been soliciting investors in the weeks before the sale.

“Because foreign investors were involved, the [Washington state] Office of the Treasurer intentionally avoided working with (Access the USA) and refused to include (the firm) in their solicitations to institutional investors,” Mullins said in court papers.

....Attorneys for Access the USA now contend the treasurer’s office violated anti-discrimination laws as well as the securities act. They’ve asked that the state be ordered to pay for the losses sustained by the firm’s clients, as well as punitive damages for discrimination.

The motive was. allegedly, to avoid having a 'bridge built by China' in the state.

Europe knows what it wants...and deserves to get it

Lithuanians stand up against Russia;

Lithuania's incumbent President Dalia Grybauskaite has declared victory following a second round of voting in the Baltic country's presidential elections.

With nearly all votes counted she had won 58% with her Social Democrat rival Zigmantas Balcytis trailing on 42%.

The election was fought amid rising concerns in the region after Russia's annexation of Crimea from Ukraine.

....President Grybauskaite's reputation for plain speaking has led to her being dubbed the "Iron Lady", the nickname of former British PM Margaret Thatcher whom she describes as one of her political models.

The French and British are unhappy with everyone and everything;

UK Independence Party and French National Front both performed strongly. The three big centrist blocs all lost seats, though still hold the majority.

The outcome means a greater say for those who want to cut back the EU's powers, or abolish it completely.

UK PM David Cameron said the public was "disillusioned" with the EU.Mr Cameron said their message was "received and understood".

French President Francois Hollande has called an urgent meeting of his cabinet, as Prime Minister Manuel Valls promised tax cuts a day after the results which he described as "a shock, an earthquake".

And transplanted Spaniards tweak Fidel Castro's nose;

The wives of two jailed opposition mayors in Venezuela have won elections to replace them.

The two women, whose husbands were sentenced earlier this year over their failure to contain opposition protests, won by a landslide.

....Patricia Gutierrez won 73% of the vote in the western city of San Cristobal, while Rosa Brandonisio won in the central city of San Diego with 88%.

Voters go for strong defenses against Russia, tax cuts and anti-Castroism. Ronnie and Maggie smile.

Some like it hot

Steve Landsburg notices something odd;

So the Obama administration has released a climate forecast, according to which Miami could be under water by the end of the century. Apparently we’re supposed to be very concerned about that.

....of the 5.5 million people now living in South Florida, approximately zero will be alive a hundred years from now, and those that are will presumably have had the sense to move inland well before the water reaches their breastbones.

And what about all the buildings and the other infrastructure? That will also mostly all be gone in a hundred years, with or without the rising sea. How many buildings these days are built to last a century? We already know that Miami’s beachfront hotels are going to deteriorate and then be rebuilt over the course of the century. The only question is where.

What Landsburg doesn't say (or doesn't know) is that Miami was specifically founded--by John D. Rockefeller's Standard Oil partner, Henry Flagler--because it was a warm place to live. Florida had little but swamps until Flagler began to use his railroading skills (honed rationalizing the transportation of oil) to develop the state, as an alternative to spending winters in places like New York, Philadelphia and Boston.

The city of Miami didn't exist until Flagler founded it in 1896, specifically because the area had escaped the frosts that destroyed north Florida's citrus crops in earlier years.

Making money WAS his job

The Ben now rakes it in;

Ben Bernanke used to run America's central bank. Now he's making bank - charging financial gurus across the world millions to share his insight and experience. 

Bernanke used to make $200,000 a year during his eight years as Chairman of the Federal Reserve. He can make that in a single hour now on the international speaking circuit. 

....Bernanke is walking a well-worn path of former policy makers who leave power. Former presidents, former cabinet officials and former members of Congress have all turned their experience in public service into millions.

Doing well, after 'doing good'; not a stop the presses! moment. Especially considering the alternatives;

'You can spend $250,000 for Bernanke’s time at a private dinner, or you could just sit down and read what people like (new Fed Chairwoman) Janet Yellen and (Bank of England governor) Mark Carney have to say,' David Rosenberg, chief economist and strategist at Gluskin Sheff, told the New York Times.

'You can actually do that for free and pretty much draw the same conclusions.'

Now there's a story to ponder. Why buy the cow when the milk is free?

Lithuanians, Letts and Ukraineans do it

Remember the Russian bear's appetite (on Memorial Day);

There is a lot of tension in the country. From morning till night the radio stations discuss political developments, energy policy, and military security. The older generations are particularly worried. "We have bitter experience with Soviet invasions, and the memories are coming back when we see what's happening in Ukraine," says an old man in Vilnius.

They believe in peace through strength;

At the start of April, NATO stepped up its air space reconnaissance over the Baltic region. Around 150 US soldiers are now in the country - officially for training purposes. "That makes it all the more surprising to me that on the radio, in the newspapers, and in conversation, the theoretical possibility of a Russian annexation of the Baltic states - a Crimea scenario - is being seen as a real possibility," says [Felix] Ackermann [who teaches at the Belarusian European Humanities University in exile in Vilnius].

36-year-old Laura is very conscious of this: "We see NATO airplanes, we hear them, and it reassures us a little - but will they protect us? I've been a peaceful person all my life, but now the thoughts keep bubbling up: What if…?" She thinks that Putin has always wanted to expand his territory and extend his influence.

That's why Lithuanian Foreign Minister Linas Linkevičius - like his counterparts in Estonia and Latvia - has been calling for a permanent NATO presence in his country. "The threat is real," he told DW in an interview. "Sometimes you have to speak a clear language that your opponent understands." 

Now the problem is to find a language Barack Obama understands.

Rich Cordoban leather

You'd better be rich to afford it, according to the Wall Street Journal;

Shell cordovan leather comes from the muscle beneath the hide in a small area around the rump of a horse. The shell is a layer of very dense fibers that, after a lengthy tanning process, yields leather that is particularly shiny and durable. When cordovan shoes scuff, a simple rub will erase the scratch. But since its ancient discovery by the Moors in the Spanish city of Cordoba (the town from which its name is derived), the material has been far scarcer than cow leather. A single horse provides only enough cordovan for a single pair of shoes.

Markets are amazing and subtle.

Adding to its cost is a long processing time. At Horween Leather in Chicago, a major supplier to brands like Alden and Allen Edmonds, cordovan takes six months to tan. To compare, its Chromexcel leather made from adult cows takes just 28 days to finish. Finished cordovan can cost up to 10 times more than high-quality steer leather.

So, why the sudden 'shortage' of cordovan leather?

...the answer lies in the complex dynamics of the hide market. The cordovan supply is determined by the consumption of horse meat, explained Nick Horween, the company's 30-year-old vice president and the fifth generation in his family's business. A century ago, when horses were still common transportation and horse meat was widely eaten, hides were plentiful.

But today, with world-wide consumption of equine flesh declining, hides are limited. Mr. Horween estimated that the company processes just 15% of the horsehide it used to take in when his ancestors started the company in 1905. 

Which reminds us of this, from 2009, courtesy of the Seattle Times;

There used to be a thriving horse market in this country, with buyers bidding on horses for processing plants in Stanwood; Maytown, Thurston County [WA]; and more than 20 other plants across the country, supplying an eager trade, particularly in Europe.

But the country's remaining three horse slaughterhouses, in Illinois and Texas, closed in 2007 after a sustained campaign by animal-rights activists that resulted in Congress forbidding USDA inspection of horse meat for human consumption.

That ended any legal commercial packing industry for horse meat in this country.Still, there is a demand for horse meat, particularly in Europe. But with no packer competition in the U.S. to supply it, and a glut of horses, foreign packers can set their price. 

So the horses are free to roam the West and trample the crops of poorer Americans. At least the 1%, who can afford $2,000 shoes, are inconvenienced.

Their national pastime is chess?

The St Petersburg Times laments the dangers to the Russian middle class;

Russia’s economic growth rate has plummeted from 4.3 percent in 2011 to 1.3 percent last year. Official forecasts for 2014 have been slashed repeatedly in recent months and now hover around 0.5 percent, while independent experts talk of zero growth.

The government has reacted by ramping up pressure on businesses.

Happy countries may not be all alike. Unhappy countries all inflict their own wounds.