S&P puts UK on negative outlook; US rejects telecom treaty; It's a smart, smart, smart world

1 S&P puts UK on negative outlook (The Guardian) George Osborne’s economic credibility suffered a fresh blow when Standard and Poor's became the third of the major credit ratings agency to put the UK's AAA rating on negative outlook. S&P warned there was a one-in-three chance that it would strip the UK of its cherished AAA status within the next two years. "We believe this could occur in particular as a result of a delayed and uneven economic recovery, or a weakening of political commitment to consolidation," it said.

S&P did not call for the government to abandon its austerity plans, but it warned that the deficit-cutting strategy will continue to undermine growth. It added that belt-tightening by debt-burdened consumers and weak investment by anxious firms was likely to continue to depress demand. Ministers have played down the significance of a ratings cut in recent days; but the chancellor has pinned his political reputation on maintaining Britain's reputation as a "safe haven" for foreign investors.

S&P's announcement came after Osborne was forced to announce in last week's autumn statement that economic growth has been far weaker than he hoped even in his March budget; and he now expects to flunk his self-imposed rule of cutting the public debt burden by 2015-16. S&P’s decision followed similar moves from the two other major ratings agencies, Fitch and Moody's, and will ratchet up the pressure on the government over its handling of the economy.

2 US rejects telecom treaty (Eric Pfanner in The New York Times) Talks on a proposed treaty governing international telecommunications collapsed in acrimony when the US rejected the agreement on the eve of its scheduled signing, citing an inability to resolve an impasse over the Internet. “It is with a heavy heart that I have to announce that the US must communicate that it is unable to sign the agreement in its current form,” Terry Kramer, head of the American delegation, announced moments after a final draft appeared to have been approved by a majority of nations.

The US announcement was seconded by Canada and several European countries after nearly two weeks of talks that had often pitted Western governments against Russia, China and developing countries. The East-West and North-South divisions harked back to the cold war, even though that conflict did not stop previous agreements to connect telephone calls across the Iron Curtain. While the proposed agreement was not set to take effect until 2015 and was not legally binding, Mr. Kramer insisted that the US and its supporters had headed off a significant threat to the “open Internet.”

The messy end to the proceedings highlighted intractable differences of opinion over the ever-growing importance of digital communications networks as tools for personal communications, global commerce, political proselytization and even unconventional warfare. “The word ‘Internet’ was repeated throughout this conference and I believe this is simply a recognition of the current reality — the two worlds of telecommunications and Internet are inextricably linked,” said Hamadoun Touré, secretary general of the International Telecommunication Union.

The United States has consistently maintained that the Internet should not have been mentioned in the proposed treaty, which dealt with technical matters like connecting international telephone calls, because doing so could lead to curbs on free speech and replace the existing, bottom-up form of Internet oversight with a government-led model. A bloc of countries led by Russia that included China and the host nation, the United Arab Emirates, argued throughout the negotiations that the Internet was within the scope of the talks because Internet traffic traveled through telecommunications networks. 

3 It’s a smart, smart, smart world (Nicolas D Kristof in The New York Times) The average American in the year 1900 had an IQ that by today’s standards would measure about 67. Since the traditional definition of mental retardation was an IQ of less than 70, that leads to the remarkable conclusion that a majority of Americans a century ago would count today as intellectually disabled. The trend of rising intelligence is known as the “Flynn Effect,” named for James R. Flynn, the New Zealand scholar who pioneered this area of research.

The average American IQ has been rising steadily by 3 points a decade. Spaniards gained 19 points over 28 years, and the Dutch 20 points over 30 years. Kenyan children gained nearly 1 point a year. Those figures come from a new book by Flynn from Cambridge University Press called “Are We Getting Smarter?” It’s an uplifting tale, a reminder that human capacity is on the upswing. The implication is that there are potential Einsteins now working as subsistence farmers in Congo or dropping out of high school in Mississippi who, with help, could become actual Einsteins.

The Flynn Effect should upend some of the smugness among those who have historically done well in global IQ standings. For example, while there is still a race gap, black Americans are catching up — and now do significantly better than white Americans of the “greatest generation” did in the 1940s. Another problem for racists: The country that tops the IQ charts isn’t America or in Europe. It’s Singapore, at 108. (The reason may have to do with Singapore’s Confucian respect for learning and its outstanding school system.) 

Flynn argues that IQ is rising because in industrialized societies we give our brains a constant mental workout that builds up what we might call our brain sinews. “The brains of the best and most experienced London taxi drivers,” Flynn writes, citing a 2000 study, have “enlarged hippocampi, which is the brain area used for navigating three-dimensional space.” In a similar way, he argues, modern life gives our brains greater exercise than when we were mostly living.