Time: Almanac 2009 PDF
Preview Time: Almanac 2009
Fromtheknowledgeleadersince1768 E N C Y C L O P Æ D I A Britannica A L M A N A C 2009 Inassociationwith ® E N C Y C L O P Æ D I A Britannica® JacobE.Safra,ChairmanoftheBoard JorgeAguilar-Cauz,President Chicago·London·NewDelhi·Paris·Seoul·Sydney·Taipei·Tokyo ENCYCLOPÆDIABRITANNICA,INC. EDITORIAL ARTANDCOMPOSITION ENCYCLOPÆDIABRITANNICA,INC. ThadKing StevenN.Kapusta CharlesP.Trumbull NicoleDiGiacomo JacobE.Safra PatriciaBauer CarolA.Gaines ChairmanoftheBoard RobertM.Lewis CateNichols KennethPletcher ThomasJ.Spanos JorgeAguilar-Cauz BarbaraSchreiber President MelindaC.Shepherd EDITORIALLIBRARY KarenJacobsSparks HenryBolzon MichaelRoss AmyTikkanen LarsMahinske SeniorVicePresident, AnitaWolff CorporateDevelopment INFORMATIONMANAGEMENT PRODUCTIONCONTROL Carmen-MariaHetrea DaleH.Hoiberg MarilynL.Barton SheilaVasich SeniorVicePresident MansurAbdullah andEditor WORLDDATA StephenNeher MANUFACTURING RosalineJackson-Keys MaryKasprzak KimGerber Director,Almanacand WorldData CARTOGRAPHY MEDIAASSETMANAGEMENT MichaelNutter JeannineDeubel MichaelLevy KimberlyCleary ExecutiveEditor,CoreEditorial COPY KurtHeintz SylviaWallace MarshaMackenzie JohnM.Cunningham ManagingEditorand YvetteCharboneau DirectorofProduction GlennJenne CONTRIBUTINGEDITOR RichardFraiman JoyButts KellyKnauer Publisher AssistantDirector,BrandMarketing DESIGN StevenSandonato HelenWan AnthonyWingKosner GeneralManager AssociateCounsel PICTURES CarolPittard HollyOakes PatriciaCadley ExecutiveDirector,Marketing SeniorBrandManager,TWRS/M Services SuzanneJanso TomMifsud BookProductionManager Director,RetailandSpecialSales Anne-MichelleGallero PeterHarper DesignandPrepressManager Director,NewProductDevelopment MichelaWilde LauraAdam AssociateBrandManager AssistantDirector,Newsstand Marketing Specialthanksto:GlennBuonocore,SusanChodakiewicz,MargaretHess,BrynnJoyce,RobertMarasco,Brooke Reger,MarySarro-Waite,IleneSchreider,AdrianaTierno,AlexVoznesenskiy ©2009BYENCYCLOPÆDIABRITANNICA,INC.Allrightsreserved. AllTIMEmaterialcopyright©2009TIMEInc.Allrightsreserved. Photos(frontcoverlefttoright):DominiqueCharriau/WireImage/GettyImages;OfficeofUSSenatorBarack Obama;GabrielBouys/AFP/GettyImages;SeanGallup/GettyImages;J.Vespa/WireImage/GettyImages ISBN-13:978-1-59339-228-4.InternationalStandardSerialNumber:1540-8868. Nopartofthisworkmaybereproducedorutilizedinanyformorbyanymeans,electronicormechanical,includ- ingphotocopying,recording,orbyanyinformationstorageandretrievalsystem,withoutpermissioninwriting fromthepublisher. ENCYCLOPÆDIABRITANNICAALMANAC2009 Britannica.commaybeaccessedontheInternetathttp://www.britannica.com.Forinformationongroupand bulksales,[email protected]. (TrademarkReg.U.S.Pat.Off.) TABLEOFCONTENTS 3 YearinReview LifeonEarth..........................188 Features Animals.............................188 TheSupremeCourt’sGroupHug..........5 Plants..............................189 byJeffreyRosen,TIME Geology.............................191 Libertarians:A(NotSo)LunaticFringe......6 PreservingNature......................199 byNathanThornburgh,TIME Health................................200 Biofuels—TheNextGreatSource ..........7 DietandExercise.....................207 ofEnergy? byClarenceLehman SubprimeMortgages:ACatalystfor........8 World GlobalChaos byJanetH.Clark TheGhostsoftheBalkans...............217 TheGulfStates’ConstructionBoom .......9 bySamanthaPower,TIMEcolumnist, byJohnDukeAnthony andtheTIMEstaff Chronology,July2007–June2008 CountriesoftheWorld..................218 MonthbyMonth.......................11 Disasters,July2007–June2008 FLAGS.............................PLATES1–6 MonthbyMonth.......................30 MAPS.............................PLATES7–16 RulersandRegimes....................548 People Populations...........................562 TheTIME100,2008.....................35 LanguagesoftheWorld.................564 CelebritiesandNewsmakers..............37 Scholarship...........................565 Obituaries..............................76 Religion ..............................567 The2008AnnualMegacensusof Awards Religions............................568 Law&Crime ..........................574 TIME’sTop100Films....................89 MilitaryAffairs.........................577 TIME’sPersonoftheYear,1927–2007.....90 NobelPrizes............................91 SpecialAchievementAwards.............104 UnitedStates ScienceHonors........................110 USPresidentialElectionof2008..........579 byJamesCarney(McCain)and MichaelWeiskopf(Obama) Nature,Science,Medicine,&Technology History...............................581 OurSuper-SizedKids ...................117 UnitedStatesChronology..............581 byJeffreyKlugerandBryanWalsh,TIME ImportantDocumentsinUSHistory.....584 Time.................................119 Government...........................596 TheUniverse..........................127 ThePresidency ......................596 Cosmogony..........................127 TheSupremeCourt...................624 Constellations.......................129 TheCongress........................627 AstronomicalPhenomenafor2009 .....135 TheSenate .......................627 TheHouseofRepresentatives........630 MeasurementsandNumbers ............154 MilitaryAffairs.........................638 AppliedScience........................165 Population............................645 Communications.......................166 TheStatesandOtherAreas..............653 AerospaceTechnology ..................167 StateGovernment......................682 SpaceExploration....................167 SpaceExplorationFirsts...............171 Cities.................................687 AirTravel..............................172 LawandCrime.........................689 Meteorology...........................174 Society...............................696 GeologicDisasters .....................178 Family..............................696 Education...........................699 CivilEngineering.......................180 4 TABLEOFCONTENTS Business Sport TheNewPresident’sEconomyProblem....701 SportingCodesforCountries.............783 byJustinFox,TIME TheOlympicGames ....................785 USEconomy...........................703 SpecialOlympics.......................849 Energy..............................705 AutomobileRacing .....................849 TravelandTourism .....................706 Baseball..............................851 Employment...........................709 Basketball............................856 ConsumerPrices.......................719 BilliardGames.........................860 USBudget............................721 Bowling...............................861 USTaxes..............................724 Chess................................863 Cricket ...............................864 Arts,Entertainment,&Leisure Curling...............................865 Hollywood’s800-lb.GoldenGorilla........727 Cycling...............................865 byRichardCorliss,TIME Football ..............................868 MotionPictures........................729 US.................................869 AcademyAwards.....................729 Canadian...........................875 Australian...........................875 Television.............................746 Rugby..............................875 AssociationFootball(Soccer)...........876 EmmyAwards .......................746 Golf..................................880 Theater...............................749 HorseRacing..........................886 TonyAwards.........................749 EncyclopædiaBritannica’s IceHockey............................895 25NotableUSTheaterCompanies....752 Marathon.............................898 Music................................752 Rodeo................................901 GrammyAwards......................752 EncyclopædiaBritannica’s Skiing................................902 25World-ClassOrchestras...........758 SledDogRacing.......................906 EncyclopædiaBritannica’s Top25OperaCompanies............759 Swimming ............................907 Pageants.............................759 Tennis................................912 ArtsandLettersAwards.................761 Track&Field..........................927 PulitzerPrizes .......................761 Volleyball.............................936 ArchitectureAwards ....................781 WeightLifting..........................936 SpecialHonors ........................782 INDEX....................................938 The Supreme Court’s Group Hug byJeffreyRosen,TIME The biggest surprise from the Supreme Court about “the personalization of judicial politics,” termthatjustended:BarackObamaheartsthe wherebypeopleidentifytheruleoflawwiththeway Robertscourt.AttheendofJune,theDemocra- individualjusticesvoteincloselydividedcases. ticcandidatepraisedJusticeAntoninScalia’s5–4de- Embracing as a model his greatest predecessor, cisionstrikingdowntheWashingtonbanonhandgun JohnMarshall,Robertssaidhewouldusehispower possession,arulingthatrecognizestherighttobear toassignmajorityopinionstopromotenarrowdeci- armsasanindividualright.Twoweeksearlier,from sionsagreedtobywide,bipartisanmajoritiesrather the other side of the ideological spectrum, Obama thanbypolarizing5–4splits.Onanevenlydivided praisedJusticeAnthonyKennedy’s5–4decisional- court,Robertsfelthecouldconvincetheliberaland lowingenemycombatantstochallengetheirdeten- conservativecampsthatconvergingonnarrowopin- tionsinfederalcourts,arebuketotheBushadminis- ionswasineveryone’sinterest. tration’s policies toward Guantánamo detainees. Duringhisfirstterm,whichendedin2006,Roberts Obama’sonlymajorquarrelwiththecourtwasthe managedtoavoid5–4splits—forthemostpart,he 5–4decisionbanningtheexecutionofpeoplewho said,becausehiscolleagueswereeagertobeniceto rapechildren:hesaidhehaslongbelievedthat“the thenewcomer,likeprospectivein-lawsmeetingafi- mostegregiousofcrimes”deservethedeathpenalty. ancéforthefirsttimeatThanksgiving.Thenthehon- WhenaleadingDemocratiscriticizingtheSupreme eymoonended.Whenvariousjusticeswereaskedin Courtfornotbeingconservativeenough,it’stimefor 2007whethertheythoughtRobertscouldrebuildan liberalstobreatheasighofrelief. atmosphereofbipartisanharmony,theywerehardly It’struethattheremaybesomeelection-yearpan- encouraging. Scalia scoffed, “Good luck!” Justice deringinObama’sembraceofacourtthatmanypre- StephenBreyersuggestedRobertscouldbestfoster dicted would veer to the right under Chief Justice comitybyjoiningBreyer’sopinions.Kennedyhada JohnRoberts.Butbyanymeasure,thetermthatjust similarresponse:“Justletmewritealltheopinions!” endedwashardlyadisasterforliberals.Onthecon- Andyet,inhisthirdterm,Robertshasachievedwhat trary, liberals won several important victories—not hiscolleagueshadthoughtwasnearlyimpossible.His onlytheGuantánamoandchild-rapecasesbutalsoa successisareminderoftheimportanceofpersonal- seriesofemployment-discriminationcasesinwhich itywhenitcomestoleadershipontheSupremeCourt, thecourtsidedwithworkersratherthanemployers, inwhichthequirksandtemperamentsofindividual bybroad,bipartisanmajorities. justices are as important as judicial philosophy in Indeed,thecourt’stermwassomethingofagroup shaping the law. Roberts told me that he thought hug between the liberal and conservative justices. muchofMarshall’ssuccesswasduetothefactthat The Supremes were far less divided than they his colleagues liked and trusted him. Marshall per- seemedin2007,whentheysnipedatoneanotherin suadedthejustices,atthebeginningofthe19thcen- unusuallypersonalterms.Despitesomehigh-profile tury,toliveinthesameboardinghouseanddiscuss splitsattheend,only17%ofthecasesweredecided casesoverglassesofhisexcellentMadeira. by5–4votes—downsharplyfromthepreviousterm, Roberts’ssuccessisalsoareminderofthechief inwhich33%ofthecaseswere5–4splits.Casesup- justice’slimitedbutrealpower:asthejusticewho holdingvoter-IDrequirements,executionbylethalin- speaksfirstatthecourt’sprivateconference,hecan jection,federaleffortstocurbchildpornography,and frametheissuesandinfluencethekindsofcases thedetentionofAmericancitizensinIraqwerede- thatthecourtagreestohearinthefirstplace.Under cidedunanimouslyorbylopsidedmajorities. Roberts’sleadership,thecourthasagreedtohear So,whatexplainsthenewmoodofbipartisanhar- fewerpolarizingconstitutionalcasesandmorecases monyontheRobertscourt?Atleastsomeofthecredit ofinteresttobusiness,whichthejusticesaremorein- goestoRoberts’spersonalityandleadershipstyle. clined to resolve without dividing along ideological Hewentoutofhiswaytopersuadehiscolleaguesto lines.Ofthe15casesinwhichtheUSChamberof turndownthevolumeandlightenupwhentheydis- Commercefiledbriefsthisyear,80%weredecidedby agreed,evenspicinguphisdissentinatechnicaltele- 7–2orhigher,andathirdwereunanimous. comdisputebyborrowingplayfullyfromBobDylan’s Roberts told me that he thinks that bipartisan “LikeaRollingStone”:“Whenyougotnothing,yougot agreement in the less-visible business cases can nothingtolose.” helpdevelopa“cultureandanethosthatsays,‘It’s AccordingtoScalia,Robertshasusedhispowerto goodwhenwe’realltogether.’”AsignofRoberts’s assignopinionswhenhe’sinthemajoritytoencour- successinputtinghisstamponthecourt:hewasin agehiscolleaguestowritenarrowdecisionsthatJus- themajorityin90%ofthecasesthisterm,morefre- ticesonbothsidescanaccept.“Thechiefmaysay, quentlythananyotherjustice. ‘Whydon’tyoucomealongwithaverynarrowopin- Howlongwillthechangedmoodlast?Theroleofper- ion?Wecangetsevenvotesforthat,anditwilllook sonality on the Supreme Court shouldn’t be over- alotbetter,’”ScaliasaidonTheCharlieRoseShow. stated.Incasesinwhichtheyhavestrong,preexisting “You want to go along with the chief justice be- constitutionalviewsonissuesfromabortiontoguns cause…youwanttomaketheinstitutionwork.” toGuantánamo,thejusticesareunlikelytopersuade This, as it happens, is precisely what Roberts oneanother.That’swhy,regardlessofRoberts’scur- promisedtodoatthebeginningofhistenure.InJuly rentconsensusbuilding,thefutureofthecourtwillbe 2006,Robertstoldjournaliststhathewasworried determinedbythe2008presidentialelection. 6 YEARINREVIEW Libertarians: A (Not So) Lunatic Fringe byNathanThornburgh,TIME Withhisbellyhidinghisbelt,withhisredsus- ithasatemple,itisNevada.It’snotjustthelowtaxes pendersandwhitebeard,GlenParshallisa orthelibertineveneerofLasVegas;Nevadaisfree,I deadringerforSantaClaus,exceptforthe wastold,inpartbecausesomuchofitispopulated snub-nosed pistol he keeps tucked in his back byanunbrokenandunbowedcasteofranchers,min- pocket.Parshallspendshisdaysbehindtheguncage ers,andhomesteaderswhobelieveintheprimacyof of Bargain Pawn, in a roughneck North Las Vegas privateproperty. neighborhoodlitteredwithhomelessencampments, As you might guess, things that come between a Catholiccharities,andpawnshops.It’snoBellagio. Nevadanandhislanddon’tsitwell,andoverthepast Butheisagentlemanwhotreatshiscustomerswith decade,there’sbeennothingmoredisruptivethan respect,whetherhoodlumorhomeowner.Heknows theenvironmentalmovement’sgoodintentions.Nye everythingthereistoknowaboutweaponsandisa countyrancherJimBerg,68,doesn’tcallhimselfa sticklerforthebyzantinerulesofgunownership—the libertarian,buthethinkstheGOPhaslostitswillto waitingperiods,thebackgroundchecks,theATFcall- keepthegovernmentfromaffectinghislivelihood.He backsandinformationrequests. has plenty of war stories about his county’s show- Butjustbecauseheobeystherulesdoesn’tmean downswiththefederalgovernment,includinga1991 helikesthem.Parshallisdissatisfiedwithalotof standoffwhenarmedfederalescametoconfiscate whatgovernmentdoes.Hehatesourgunlaws.Hates cattlebelongingtoaneighboringrancherwhohadlet thewarinIraq.Hedoesn’tusedrugs,butheseesthe hisherdgrazeonoff-limitsfederalland.TheForest fight against them as another government power ServicegotsomeofBerg’scattleinthedragnet,auc- grab.GrowingupasaMormoninSaltLakeCity,Par- tionedthemoff,andkepttheproceeds.“Theywanted shallwasaBarryGoldwaterRepublican.Nowhe’sthe trouble that day,” he says. “Why else would you kindofvoterwhoshouldscaretheGOPmost—and gather another man’s cattle with 25 to 30 armed he’snotalone. men?” Maybeyouhaven’theard,but2008istheyearof Thereisalotinthecomplaintsinthelibertarian freedom.FirsttherewastheRonPaulrevolution,in heartlandthatsoundslikenostalgiaforanidealized whichanavuncular10-termrepresentativefromBra- Americanpast.JimBergwilltellyouaboutgrazing- zoriacounty,Texas,raisedmorethanUS$34million rightsgrievances,buthe’sjustasquicktolamentthe as a pseudo-Republican candidate, garnered more deathoftheranchinglifestyle.“Mygrandkidshave thanamillionprimaryvotes,andoutperformedRudy scatteredlikequail,”hesays.“They’veallgonecity.” GiulianiandFredThompson,allonthebackofaget- Thissensethatprogresshasgonetoofarandtoo government-off-my-backplatform. fastunitesalargeswathoflibertariansfromcoastto Nowthere’stheLibertarianParty,whichsoldalittle coast. To many, modernity just means having our bitofitshard-lineliberty-lovingsoulinexchangefor dailylivesruledbymechanismsthathavegrownso themostrespectablecandidateithaseverhad:re- complexthattheyarebeyondcomprehensionorcon- cently converted former Republican congressman trol.It’sanotionthatbondsanti-WTOprogressives BobBarr. andanti-UNconservativesalike—andifthepartyhas Since2000,Libertariancandidateshavepeeledoff anyrealhopeofbecomingpowerful,thoseseemingly enoughvotesfromRepublicancongressionalcandi- disparatepointsonthepoliticalcontinuumwillhave datestocostthepartyracesinWashington,Nevada, togetcloser. Montana,and,mostrecently,Louisiana.Butifany- It’stemptingtothinkoflibertarianismasnothing thing,theGOPplatformhasgrownmorecommitted morethanold-schoolRepublicanism,butit’salways toforeignmilitaryinterventionanddomesticmoraliz- beenpartiallyleft-wing,drawingfromalonghistoryof ing.TheselectionofJohnMcCainwasafinalinsult— American anarchism. The modern challenge is to mostlibertariansviewhim,fairlyornot,aspro-war, unitethosetwowings—or,asmagician(andstalwart anti-gun, pro-environmentalism, and anti–free libertarian)PennJillettetoldme,“Convincethedope speech(thankstohisadvocacyforcampaign-finance guysthatthegunguysareOK,andviceversa.”And reform).InNevada,McCaincameinthirdintheGOP many libertarians believe the time is now. It helps primary,behindMittRomneyandRonPaul.Whenthe thattheUShasbeenthrottledforacenturybytwo stateGOPtriedtocrownMcCainatitsRenoconven- partieswhosecoredifferencesarenarrowing.Foran tioninApril,somanyPaulsupportersshowedupthat electoratehavingahardertimedistinguishingCoke party leaders literally fled the hall, turned off the fromPepsi,there’sathirstforsomething—anything— lights,andpostponedtheconvention. new. LandofLiberty.Thecentralgoaloflibertarianismis The things libertarians care about—being able to hardtodisagreewith:freedom.Definingitisanother gamblelegallyviatheirhomecomputers,continuing matter.PartymembersI’vemetoftenspeakoffree- tohomeschooltheirkidswithoutmuchinterference, domasifitwereaphantomlimb:you’rebornwithit, keepingtaxeslow—speaktoalotofAmericans.Ifthe butitgetstakenfromyoubythebureaucraticvio- oldpartywascobbledtogetherfromhard-linestrains lenceoftheEPA,theATF,theDOE,theDEA,theUN, of voluntarianism, propertarianism, and paleoliber- NCLB, NAFTA, and—above all—the IRS. Freedom’s tarianism, the new Libertarian Party is essentially restoration is the magic moment when the nanny suburbanarianism. statemeltsawayandyoucanseethelifeyouwere Votersalienatedbyourcalcifiedpartysystemmay supposedtolivebeforethetaxauditorsandenviron- findintheLibertariansapartythat’salotlikeGlen mentalregulatorsanddrugwarriorsallcametorope, Parshall—armedtotheteethbutwithagentlelogic brand,andpenyouinforlifewiththeirendlessrule andacontagiousenthusiasmforfreedominallits makingandintrusions. forms. Libertarians are getting ready for the main- IfthefreedomthatlivesintheLibertarianimagina- stream, and mainstream America may finally be tionhasanearthlyhome,itistheAmericanWest.If readyforthem. YEARINREVIEW 7 Biofuels—The Next Great Source of Energy? byClarenceLehman Aboom in the production of biofuel was under frombiomassthathasahighcontentofcellulose. way in 2007, especially in the United States, Thiscellulosicethanolcouldbeproducedfromabun- where in January about 75 refineries for pro- dant low-value material, including wood chips, ducing the biofuel ethanol from corn (maize) were grasses,cropresidues,andmunicipalwaste.Themix being built or expanded. This construction, not in- ofcommerciallyusedbiofuelswillundoubtedlyshift cludingadditionalfacilitiesonthedrawingboard,was asthesefuelsaredeveloped,buttherangeofpossi- expected to double existing capacity, and the de- bilitiespresentlyknowncouldfurnishpowerfortrans- mandforcornpusheditspricesohighthatAmerican portation,heating,cooling,andelectricity. farmersplantedmorelandwiththecropthanthey Inevaluatingtheeconomicbenefitsofbiofuels,the hadinageneration.Biofuelwasperceivedasaben- energyrequiredforproducingthemhastobetaken eficialalternativetopetroleumandotherfossilfuels intoaccount.Forexample,ingrowingcorntoproduce as the price of petroleum rose during the year to ethanol,fossilfuelsareconsumedinfarming-equip- recordlevelsandworldwideconcernincreasedabout mentuse,infertilizermanufacturing,incorntrans- how greenhouse-gas emissions from petroleum-de- portation,andinethanoldistillation.Inthisrespect rivedfuelswerecontributingtoclimatechangeinthe ethanolmadefromcornrepresentsarelativelysmall form of global warming. Despite its perceived eco- energy gain; the energy gain from sugarcane is nomic and environmental benefits, however, many greaterandthatfromcellulosicethanolcouldbeeven criticswereexpressingconcernsaboutthescopeof greater.Biofuelssupplyenvironmentalbenefitsbut, theexpansionofcertainbiofuelsbecauseoftheirpo- dependingontheirimplementation,canalsohavese- tentialtocreatenewproblems. rious drawbacks. As a renewable energy source, Biofuelsarefuelsthatarederivedfrombiomass— plant-basedbiofuelsinprinciplemakelittlenetcon- thatis,plantmaterialoranimalwaste.Sincesuch tributiontothegreenhouseeffectbecausethecar- materialscanbereplenishedreadily,biofuelsarea bondioxide(amajorgreenhousegas)thatentersthe renewable source of en- airduringcombustionwill ergy, unlike fossil fuels, “ have been removed from such as petroleum, coal, In March the US De- the air earlier when the and natural gas. Some combustiblematerialgrew. long-exploited biofuels, partment of Energy an- Suchamaterialissaidto such as wood, can be becarbon-neutral.Inprac- useddirectlyasarawma- nounced that it would be tice, however, the indus- terial that is burned to trialproductionofagricul- produceheat.Theheat,in investing as much as turalbiofuelscanresultin turn,canbeusedtorun additional emissions of generators in a power US$385 million in six greenhousegasesthatcan planttoproduceelectric- offsetthebenefitsofusing ity. A number of existing refineries for cellulosic a renewable fuel. These power facilities burn ” emissions include carbon grass, wood, or other ethanol. dioxidefromtheburningof kindsofbiomass. fossilfuelstoproducethe Liquid biofuels are of biofuel and nitrous oxide particular interest be- from soil that has been cause of the vast infra- treatedwithnitrogenfertil- structurealreadyinplacetousethem,especiallyfor izer.Inthisregard,cellulosicbiomassisconsideredto transportation.Theliquidbiofuelingreatestproduc- bemorebeneficial. tion is ethanol (an alcohol), which is made by fer- Landuseisalsoamajorfactorinevaluatingthe menting starch or sugar. In the United States—the benefitsofbiofuels.Cornandsoybeansareimpor- leadingproducer—ethanolbiofuelismadeprimarily tantfoods,andtheiruseinproducingfuelcanthere- from corn grain, and it typically is blended with foreaffecttheeconomicsoffoodpriceandavailabil- gasoline to produce a fuel that is 10% ethanol. In ity.In2007aboutone-fifthofUScornoutputwas Brazil, which had been the leading producer until usedforbiofuel,andonestudyshowedthatevenif 2006,ethanolbiofuelismadeprimarilyfromsugar- allUScornlandwasusedtoproduceethanol,itcould cane, and it is commonly used as 100% ethanol replace just 12% of gasoline consumption. Crops fuelor in gasolineblendscontaining85% ethanol. grownforbiofuelcanalsocompetefortheworld’s Thesecondmostcommonliquidbiofuelisbiodiesel, naturalhabitats.Forexample,emphasisonethanol which is made primarily from oily plants (such as derivedfromcornisshiftinggrasslandsandbrush- thesoybeanoroilpalm)andtoalesserextentfrom lands to corn monocultures, and emphasis on othersources(suchascookingwastefromrestau- biodieselisbringingdownancienttropicalforeststo rants). Biodiesel, which has found greatest accep- makewayforpalmplantations.Lossofnaturalhabi- tanceinEurope,isusedindieselengines,usually tatcanchangehydrology,increaseerosion,andgen- blended with petroleum diesel in various percent- erally reduce biodiversity and wildlife areas. The ages. clearingoflandcanalsoresultinthesuddenrelease Otherbiofuelsincludemethanegas,whichcanbe ofalargeamountofcarbondioxideastheplantmat- derivedfromthedecompositionofbiomassintheab- teritcontaineddecays. sence of oxygen, and methanol, butanol, and di- Someofthedisadvantagesapplymainlytolow-di- methylether,whichareindevelopment.Muchfocus versity biofuel sources—corn, soybeans, sugarcane, isonthedevelopmentofmethodstoproduceethanol oilpalms—whicharetraditionalagriculturalcrops.An 8 YEARINREVIEW alternativerecentlyproposedwouldusehigh-diversity liters(21billiongallons)oftheamountbebiofuels mixtures of species, with the North American tall- otherthancorn-derivedethanol.Inadditionthelaw grass prairie as a specific example. Converting de- continuedgovernmentsubsidiesandtaxincentives gradedagriculturallandpresentlyoutofproduction for biofuel production. Some observers hoped that tosuchhigh-diversitybiofuelscouldincreasewildlife the law would encourage the commercialization of area,reduceerosion,cleansewaterbornepollutants, technologyforproducingcellulosicethanol,forwhich store carbon dioxide from the air as carbon com- there were a number of pilot plants in the United poundsinthesoil,andultimatelyrestorefertilityto States. degradedlands.Suchbiofuelscouldbeburneddi- The distinctive promise of biofuels not shared by rectly to generate electricity or converted to liquid other forms of renewable energy, such as solar fuelsastechnologiesdevelop. power,isthatincombinationwithanemergingtech- Theproperwaytogrowbiofuelstoserveallneeds nology called carbon capture and storage, biofuels simultaneouslywillcontinuetobeamatterofmuch arecapableofperpetuallyremovingcarbondioxide experimentationanddebate,butthefastgrowthin from the atmosphere. Under this vision biofuels biofuel production will likely continue. In the Euro- would remove carbon dioxide from the air as they pean Union, for example, 5.75% of transport fuels grew,energyfacilitieswouldcapturethatcarbondiox- aretobebiofuelsby2010,with10%ofitsvehicles idewhenthebiofuelswerelaterburnedforpower, torunexclusivelyonbiofuelsby2020.InDecember andthenthecapturedcarbondioxidewouldbese- 2007USPres.GeorgeW.Bushsignedintolawthe questered(stored)inlong-termrepositoriessuchas EnergyIndependenceandSecurityAct,whichman- geologicformationsbeneaththeland,insediments datedtheuseof136billionliters(36billiongallons) ofthedeepocean,orconceivablyassolidssuchas ofbiofuelsannuallyby2020,morethanasixfoldin- carbonates.Withproperplanning,therefore,biofuels creaseover2006productionlevels.Thelegislation havethepotentialtohelpcreatetheconditionsnec- required, with certain stipulations, that 79 billion essaryforasustainableworld. ClarenceLehmanisanAdjunctProfessorintheDepartmentofEcology,Evolution,andBehaviorattheUni- versityofMinnesota. Subprime Mortgages: A Catalyst for Global Chaos byJanetH.Clark Oneversionofchaostheoryopinesthatabut- fundingcostsandthewidespreadbeliefthatifbor- terfly flapping its wings in Beijing could pro- rowerscouldnotmaintainloanrepayments,theprop- duceachangeinatmosphericpressurethatin erties could be repossessed and resold at much turncouldcauseatornadoinKansas.This“butterfly higher prices. Credit standards were lowered, and effect”graphicallydemonstratesthetheorywhereby manyloansweremadetohigh-riskborrowers,includ- a small change in one area can cause a chain of ing those in low-income minority areas, who might eventsthatleadstoamajoreffectsomewhereelse. otherwise have been excluded from the market. It Soitwasin2007whenlossesinthesubprime-mort- wasestimatedthatUS$450billion,or30%,ofout- gage sector in the US standing subprime loans led to downturns in wereadjustable-ratemort- “ many housing markets In the financial sector, gages in which the repay- around the world, fol- mentratehadbeensetfor lowedbyawidespread Countrywide Financial, two years before being tighteningofcreditand reset at higher interest turmoil in international the largest mortgage rates (plus a margin) in financialmarkets. 2007and2008.Therapid Earlyintheyear,there lender in the US, reported increase in interest rates was growing concern by the Federal Reserve abouttheriseinmort- a third-quarter loss of (Fed)from1%inmid-2004 gagedefaultsintheUS to 5.25% in mid-2006 housing market and US$1.2 billion, its first meant that by midyear fearsofaUSrecession, 2007 a rising number of ” which resulted in a loss in 25 years. the estimated six million global sell-off in equi- subprime borrowers were ties in February. Over defaulting on their mort- thepastdecade,strong gage payments, and their economicgrowth,mod- homes were being repos- erateinflation,andlow sessed.Combinedwithan interestrateshadencouragedhomeownershipinthe absenceofnewbuyers(deterredbythehigherinter- USandotherdevelopedcountries,whilethestrong estrates),thisledtoaslumpinthehousingmarket. riseinhousevaluesmadepropertyanattractivein- InAugustsalesofnewhomesweredown21%over vestmenttomorepeople,includingthosewithpoor theyear,andthedeclinewasdeepening.Astheyear creditrecordsandlowincomes,whocouldnotqual- progressed,itbecameincreasinglyclearthattheUS ify for prime-rate loans from mainstream lenders. problem had global implications and could not be Thisledtoanincreaseinthecompetitivenessand contained.Thiswasbecausemuchofthemortgage proliferationofsubprime-mortgagelendersandbro- debt had been rolled into bonds, called mortgage- kers.Confidenceamonglenderswasboostedbylow backedsecurities,andthenrebundled(togetherwith YEARINREVIEW 9 lower-riskassets)byinvestmentbankersinorderto money,withanadditional£18billion(aboutUS$37 gainahighercredit-riskrating.Theapparentlyless- billion)indepositsbeingunderwrittenbythegovern- riskybondswerethensoldtootherinvestorsonthe ment. wholesalemoneymarketascollateralizeddebtobli- InJunetheUSinvestmentbankBearStearnsan- gations(CDOs).ThemarketforCDOswasextremely nouncedthattwoofitshedgefunds,whichinvested buoyant, and banks, pension funds, hedge funds, insubprime-relateddebt,hadregisteredlargelosses. andotherinvestorsallovertheworldboughtthem. InMarch2008thecompanywasacquiredbyJPMor- Crucially,thecomplexstructureofthemarketmadeit ganChaseforafractionofitsvalueinrecentyears. difficulttoknowwhowasholdingthedebtandwhere TheFedbackedthedealwithaUS$30billiondollar itwasintheworldfinancialsystem. loanandbyloweringitskeydiscountrateofinterest. Bymidyear2007,housingmarketsinmanycoun- Otherfunds,locatedasfarawayasAustralia,alsoan- trieswerebeginningtofalterandhousepricestofall. nounced losses and froze redemptions. Securities HousepricesinmanyotherWesternindustrialcoun- backedbysubprimemortgageswerealsobeingused trieshadrisenfasterthanintheUS(up103%)over ascollateralformoreborrowingandwereputtingad- thepreviousdecade,ledbyIreland(up253%),theUK ditionalpressureonfinancialmarkets.InJulythere (194%), Spain (173%), France (137%), Australia wereincreasingworriesabouttheexposureofsev- (135%),Sweden(124%),Denmark(115%),andNew eral state-owned German banks to subprime debt, Zealand(105%).Thesupplyofhousesin2005–06 andinearlyAugusttheFrenchbankBNPParibasan- hadacceleratedsharplycomparedwith10yearsear- nouncedthatitwassuspendingfundsinvestedinUS lier;againitincreasedfastestinIreland(up210%), subprime-relatedmortgagesbecauseofthedifficulty Spain(115%),Sweden(113%),andDenmark(76%). of valuing the underlying assets. Markets were In the UK the number of mortgages approved for stunned on 9 August when the European Central homebuyersfellforthethirdstraightmonth,andat Bankintervenedwithanunprecedentedofferofun- justover44,000inOctober2007,itreachedarecord limitedshort-termloanstothebankingsystem.Itin- low.Theincreasedcostofmortgages—combinedwith jected>130billion(aboutUS$179billion)inorderto therejectionofoneinthreemortgageapplicants— avertapotentialliquiditycrisiswhenovernightinter- contributedtoadeclineinthenumberofbuyersfor estratesroseto4.7%,exceedingthe4%cap.The 11straightmonths.Therateofrepossessionsinthe FedmadeamoremodestinterventionofUS$24bil- UKwasaccelerating,withnearly30,000reposses- lion. Further injections of funds continued, and in sionordersinthethirdquarterof2007. mid-DecembercentralbanksgavearecordUS$530 IntheUK,NorthernRockhadtobebailedoutbythe billiontoboostliquidityincreditmarkets. BankofEnglandinSeptemberandwasthefocusof Towardtheendoftheyear,sharpdeclinesinthe continuing attention. Northern Rock was the UK’s valueofthedollaragainstallmajorcurrenciesraised eighth largest bank and fifth biggest mortgage concernsofinflationintheUS,wheretherateofcon- lender,accountingforoneinfiveUKmortgages.The sumerpriceincreaseswasalreadyaccelerating.This bankhadpioneeredthesecuritizationofmortgages limitedtheFed’sscopetoraiseinterestratesforfear intheUK,andthoughotherlendersweremorere- oftheinflationaryconsequences.InDecemberthe strained,bythebeginningof2007abouthalfofall Feddetailedplansthat,ifimplemented,wouldgiveit outstandingmortgageshadbeensoldoffinthisway. morecontrolovertheUSmortgagemarketandpre- BylateNovemberitwasunclearwhatwouldhappen vent another subprime crisis. In the UK politicians to Northern Rock, which was being propped up by andfinancialregulatorswereplanningbanking-sys- around£25billion(nearlyUS$52billion)intaxpayer temreformstoreduceliquidityriskinthefuture. JanetH.Clarkisaneditor,independentanalyst,andwriteroneconomicandfinancialtopics. The Gulf States’ Construction Boom byJohnDukeAnthony Intheearly21stcentury,virtuallyallsixGulfCoop- Oneresultofthisvastwealthandpoliticalstability erationCouncil(GCC)countries—Bahrain,Kuwait, wasthelargenumberofforeignfirmswithofficesin Oman,Qatar,SaudiArabia,andtheUnitedArab theregion;forexample,accordingtotheUSDepart- Emirates (UAE)—showcased levels of economic de- mentofCommerce,over750Americancompanies velopment and infrastructure expansion not seen had established offices, acquired new business li- since the 1970s oil boom. Indeed, metaphorically censes, and/or entered into joint commercial ven- speaking, the Gulf states, especially the UAE’s tureswithlocalpartnersby2007.TheTexas-based largest emirates, Abu Dhabi and Dubai, had wel- oil-servicesfirmHalliburtontriggeredwidespreadcrit- comed the return of an earlier era’s most om- icismwhenitannouncedinMarch2007thatitwas nipresent bird: the building crane. In 2007 the movingitsinternationalheadquarterstoDubai.Ac- mixed-use Burj (“Tower”) Dubai, the final height of companyingthesetrendswasanincreaseinthepro- whichwasexpectedtoexceed800m(2,640ft),was fusion of world-class banking institutions, together officiallydesignatedtheworld’stalleststructure,de- withagreatconcentrationofArabinvestmentcapital spitethefactthatitwasstillunderconstruction.Nu- andliquidity.On26Sep2005,tradingbeganonthe merousfactorsandforcesdrovetheboom:thevast DubaiInternationalFinancialExchange,thefirstin- public-andprivate-sectorcapitalaccumulationmade ternationalstockexchangeintheMiddleEast. possiblebyrecord-highoilandnatural-gasrevenues, Infrastructure projects were being financed on a theextensionofwhatwasalreadyasustainedbusi- scale not hitherto experienced. Many of these en- ness-friendlyenvironment,andtheGCCregion’ssta- deavors were associated with islands formed by bilityandpeace. land reclaimed from the sea. Nakheel (“The
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