Lords under democracy

UK is to elect Viscount Hanworth as a new member of the House of Lords. By-election is held, but the election is perfunctory under UK’s election system. Before 2007, members of the House of Lords are appointed from itself, and finally in 2007 House of Commons passed a law to require election for the member of the House of Lords.

Seems that the election system is against the principle of democracy, but some admit that there are some values in the upper house. The House of Lords is said to be the best place to hear the great speech, as the members are composed of people with deep / broad knowledge and high profession. The latest member is an economics professor at Leicester University. Though they have no power in policy making, the members sometimes work as a consultative body.

Rumor and openness

After the rumor that radiation reaches to China and sold is good for the prevention of diseases caused by radiation, Chinese rushed into stores. On one day, in Zhejiang, the region where allegedly the origin of the solt-panic and 2,000km away from Fukushima nuclear plant, 4,000 tonnes of salt were sold.

This would be the striking example for the information as a panic preventing factor. In China people may think that the official statements are not trustable, and in fact internet access is limited in the country. That status would make people prone to the rumor.

What I experienced in Japan is that all rumors are vaporized by the scientific voices. You see a lot of rumors in Twitter, but in a few hours they are gone thanks to the remarks from the specialists & insiders. Wisdom of crowd workd and functioned as the information censor. Looks like the openness in information sharing would work as the stabilizer of public opnion formulation.

Third potential bail-out

Jose Socrates resigned as the prime minister of Portugal on Mar 24, 2011 after the parliament rejected the austerity plan that his government submitted mainly because the opposition party didn’t support the plan. He predicts that IMF/EU bail-out plan would be harsher than his government’s austerity measures which included 10% (at maximum) tax on pension.

The dismal states of Portugal’s economy would be even worse after the rejection. Ten year government bond’s yields are close to 8%, higher level compared with 10% of Ireland and 12% of Greece. The upcoming election will choose the new government, which would inevitably accept the third bail-out in Euro zone.

Opposition party’s myopic actions often take place. They oppose the incumbent’s plan for the sake of getting more sheets at the next election at the expense of national interest. True, the chances are that the opposition has any special plan to get out of the doomy states of its economy, though the probability of success looks very low from my perspective. This sort of myopic action should be punished in the long run, and I’m not sure why Social Democrats dare to do so.

Power shifts after Fukushima

Japan heavily relies on nuclear energy more than most of the others. One reason is its historical discussion on independence. Soon after losing WWII, its leaders thought that no independence can be made if it has no army and depends heavily on the outside energy resources. The discussion paved the way for the birth of "Self-defense" force and nuclear plants industry. Now the industry is feeling pinch.

Now more believe that nuclear energy is dangerous, accounts for small portion of world's electricity and expensive. Before Fukushima in 2011, you remember what happened at Three Mile Island in 1979 and at Chernobyl in 1986. Now that three have done so again, unti-nuclear movements would get momentum. In 2005 only quarter of Japanese felt nuclear plants are safe, and in 2010 more than 40% did, but no longer. To add to that, even now nuclear plants with average age of 27 account for only 14% of world's electricity. The construction is far expensive than the others.

So why do we keep to use nuclear plants? One reason is environment. There is a trade-off between reduction of nuclear plants and increase in carbon dioxide. If we go without nuclear energy, in the first year we would see the carbon dioxide increase which equals to what Germany and Japan emit a year. Although EU asked its members to conduct "stress-tests" on their reactors and the Japan case provoked arguments on nuclear energy in EU countries, the rapid shift in power is less likely to happen. France may see the disaster in Japan as an opportunity. It has AREVA, the world largest nuclear plant maker which covers most of the value chain of nuclear energy industry. You can see world's nuclear usage trend here: http://www.economist.com/blogs/dailychart/2011/03/global_nuclear_power

With that said, the world may turned into less nuclear one. In the new world, gas and renewable energy would be the new leaders. As with others, you need to think of energy portfolio given risks and return, i.e. the trade-offs between economics and potential damage on the environment and human beings. To judge and take the risk is what's Japanese can do better in many fields.

Main source:

http://www.economist.com/node/18441163