Tuesday, September 30, 2008

Call centers not attractive anymore?

Almost everybody has a story or two about calling a 800 number regarding a bill, or for customer support, and ending up talking with somebody in India. Well, it appears that Indians are rapidly losing interest in the call center industry; BBC reports that:

Abhishek Tiwari, with many years behind him as a call centre man, left the industry recently despite being promoted to senior manager and recruiting youngsters for his call centre.
He has completely changed his career and seems to be very happy.
"There was a time when our office was cluttered with 500 to 600 people who came for recruitment in one day," he says.
"Today, even after lowering our standards, getting 40-50 people a day was a struggle."
Aditya Ghia, who runs a recruitment company, hires people on behalf of his BPO clients.
"Some of the KPO (Knowledge process outsourcing) and the accounts-based outsourcing firms are not doing well," he says. "That's one of the primary reasons why youngsters are looking at alternative careers."

Here is a hilarious piece from Conan O'Brien's show

I hope things get better soon

It appears that our economic crisis and the bailout plan are in front and center across the global stage.

Last week, my brother, who is an accountant in Australia, instant-messaged me, and soon after the hello shifted to questions like “are more people losing jobs?” and “how much will Uncle Sam spend?”

It is not new to me anymore that my parents and siblings are like most of the world when it comes to how closely they follow major developments here in the United States. Of course, over the past decade, America has been in the news a lot, either by its own doing or otherwise.

It seems like more often than not events here tend to worry my parents. When I called them soon after the catastrophic events of September 11th, my parents sounded as sad and distraught as any American was on that fateful day—perhaps even more than the average American. And then dad suggested that I shave my beard and not go out anywhere—just in case some crazy people took out their frustrations on me.

And when the internet-economy bubble burst, dad suggested that I find a job in Singapore or Australia because their economies were booming, and because teaching in a university paid a lot more in those countries than here in America. My brother was confident: “now that you are an American citizen, you can earn more than double what others would get paid here.” There was a silver lining in that dark cloud: American citizenship commanded a significant economic premium!

Now, my parents and my brother are following the news about our economic crises, more so because the metaphorical tsunami waves are beginning to show up in their countries too. I asked my brother how things were in Australia and his response was, “ok, so far.” While Australia seems to be managing well for now, neighboring New Zealand has officially become the first country in the Asia-Pacific region to enter into a recession, with Japan and Singapore as most likely to follow suit. Credit is tightening in India, but it helps the retired folks like my parents because they are able to get higher interest rates now for their deposits.

My sister, who is keen on her daughter coming to the US for a doctorate in computer science, is concerned about the slowdown for completely different reasons: my niece has a fabulous offer to work in India for an American firm and might, therefore, be tempted to forego higher studies in America.

What is fantastic in all this familial feedback about the American economy is that there is only a feeling of “I hope things get better soon.” No feeling of schadenfreude—the German expression that describes the pleasure people enjoy in the misfortune suffered by others. Even the major newspapers in India seem to only express concern and worries about the crisis and how it is handled, and rare are commentaries that delight in our misfortunes.

A contrast to such a background was the recent comment from the finance minister of Germany, Peer Steinbrück, who lived up to the geographic origin of the phrase schadenfreude. In his remarks to the Bundestag—the German parliament—the finance minister proclaimed that America would soon be finished as an economic superpower, and that the US should show more humility.

At least in the public sphere, the likes of the German finance minister are in the minority. On the other hand, it appears that there is still enough punch in that old saying that when America sneezes, the rest of the world catches a cold.

We are a long way from being finished as an economic superpower. However, that possibility always remains. After all, the superpowers of yesteryears—from the Roman Empire to Spain and the UK—are economic laggards now. For a few brief years in the 1980s, Japan seemed poised to challenge us, and now we feel China’s speed.

I am hoping, and a tad confident as well, that this, too, shall pass. Then, my dad will not worry about my economic future. And, more importantly, German politicians will give up their schadenfreude!

Monday, September 29, 2008

The bailout bewilderment

Existing empirical research has shown that providing assistance to banks and their borrowers can be counterproductive, resulting in increased losses to banks, which often abuse forbearance to take unproductive risks at government expense. The typical result of forbearance is a deeper hole in the net worth of banks, crippling tax burdens to finance bank bailouts, and even more severe credit supply contraction and economic decline than would have occurred in the absence of forbearance.
Cross-country analysis to date also shows that accommodative policy measures (such as substantial liquidity support, explicit government guarantee on financial institutions' liabilities and forbearance from prudential regulations) tend to be fiscally costly and that these particular policies do not necessarily accelerate the speed of economic recovery.

That is from economists Luc Laevan and Fabian Valencia who have a working paper on banking crises [pdf] out for the International Monetary Fund, covering 42 meltdowns in 37 countries since 1970. (via Reason).

It is so bizarre that there is some serious disconnect between economists and politicians. Actually, there seems to be extensive differences:
  • among economists
  • between economists and politicians
  • among politicians
  • among Democrats
  • among Republicans
When such a level of difference exists, my read of the Ockham's Razor is that we have no clue about the problem, and even lesser an understanding of the solution. In that case, is it really wise to jump into a 700 billion dollar commitment after a measly couple of days of debates and discussions?

As always, The Daily Show explains everything very well :-)

Bailout fails: 228 to 205

A hallmark of the crisis has been the stark contrast between the "real economy" of production and jobs and the tumultuous financial markets of stocks, bonds, banks, money funds and the like. Even with the 60 percent drop in housing construction since early 2006, the real economy has so far suffered only modest setbacks. Yes, there are 605,000 fewer payroll jobs than there were in December; still, 137.5 million jobs remain. Meanwhile, financial markets verge on hysteria. The question is whether this hysteria will drive the real economy into a deep recession or worse -- and what we can do to prevent that.
That was Robert Samuelson in Newsweek. I wonder what his reactions will be in his next column, which will surely be on the House voting down the bailout bill

Our local congressman, Peter DeFazio, opposed the bill all the way, and also explained his reasons in a commentary in the Register Guard. I applaud him for explaining his position so clearly to his constituents. Interestingly enough, only one Democrat from Oregon voted for the bill, and she is not up for re-election. The lone Republican voted for the bill. Details here.

Daniel Gross is livid that the House voted it down. He writes:
For in the meantime, the chaos they've created by coming to the table and then throwing a fit works to their disadvantage. Each time a deal is close to done and then gets scuppered, the market (and its many participants) freaks out. Huge quantities of wealth are destroyed. The markets fell about 8 percent after today's stunt, likely wiping out close to $1 trillion in wealth.

Sunday, September 28, 2008

Paulson's plans across the Atlantic

Interesting comments by Wolfgang Münchau in the Financial Times:
What about the lesson from the US to Europe? It is that bank bail-outs require a swift political response. When you look at the eurozone, it is not clear at all where this response could come from.
By the time European ministers have travelled for a meeting in Brussels, let alone reached or implemented a decision, the financial markets would have long melted.
Peer Steinbrück, the German finance minister, who last week told the Bundestag that the US would soon be finished as an economic superpower, should show more humility. He was lucky that last week’s crisis did not happen in Berlin or Paris or Rome. He and his colleagues would have been totally unprepared. ...
While the Americans need a better rescue plan, the Europeans need a lot more: a system that could produce a rescue plan in the first place.

And, in the same paper, Larry Summers writes,
[The] worst possible actions in the current context would be steps that have relatively modest budget impacts in the short run but that cut taxes or increase spending by growing amounts over time. Examples would include new entitlement programmes or exploding tax measures. The best measures would be those that represent short-run investments that will pay back to the government over time or those that are packaged with longer-term actions to improve the budget. Examples would include investments in healthcare restructuring or steps to enable states and localities to accelerate, or at least not slow down, their investments.

Is it possible to regulate Fannie and Freddie?

We--the taxpayers--now own Fannie, Freddie, AIG, and some gazillion mortgages and more with the $700 billion bailout. Well, once we own them, somebody has to manage them on our behalf. They have to safeguard the "public interest" and also make money for us out of this mess. At least, minimize our losses. We will need technocrats--not politicians, please!--to do this.
Can it be done? I think not.
Why? Hey, I will use Warren Buffett's comments on Fannie, Freddie, and the complex investment transactions, and after reading them you tell me why we--the taxpayers--stand any chance of coming out ahead in this:
Mr. BUFFETT: Well, it's really an incredible case study in regulation because something called OFHEO was set up in 1992 by Congress, and the sole job of OFHEO was to watch over Fannie and Freddie, someone to watch over them. And they were there to evaluate the soundness and the accounting and all of that. Two companies were all they had to regulate. OFHEO has over 200 employees now. They have a budget now that's $65 million a year, and all they have to do is look at two companies. I mean, you know, I look at more than two companies.
Mr. BUFFETT: And they sat there, made reports to the Congress, you can get them on the Internet, every year. And, in fact, they reported to Sarbanes andOxley every year. And they went--wrote 100 page reports, and they said,`We've looked at these people and their standards are fine and their directorsare fine and everything was fine.' And then all of a sudden you had two of the greatest accounting misstatements in history. You had all kinds of management malfeasance, and it all came out. And, of course, the classic thing was thatafter it all came out, OFHEO wrote a 350--340 page report examining what went wrong, and they blamed the management, they blamed the directors, they blamed the audit committee. They didn't have a word in there about themselves, and they're the ones that 200 people were going to work every day with just two companies to think about. It just shows the problems of regulation.
QUICK: That sounds like an argument against regulation, though. Is that what you're saying?
Mr. BUFFETT: It's an argument explaining--it's an argument that managing complex financial institutions where the management wants to deceive you can be very, very difficult. Or even when the management doesn't know what's going on, and--just take Bear Stearns. Bear Stearns had--I read it,anyway--750,000 derivative contracts. Now, you know, I could clone Albert Einstein, you know, and--many, many times and have him work 12-hour days forme and he would not be able to keep track of what's going on in an institutionlike that. It's--the ones that are too big to fail may be too big to manage,in some cases. And they're particularly difficult to manage if they'repromising Wall Street and their investors that they're going to do things that can't be done.
(thanks to peter gordon's blog for the link to this transcript)

Latest football rankings

I am continuing with the football rankings from my earlier posts where I re-ranked the pre-season favorites according to their respective academic rankings in the world. The Institute of Higher Education at Shanghai Jiao Tong University has released its latest rankings, which I have used here. So, if you want the eventual champion to have at least a little bit of an academic standing in the world, then root for a school with high academic ranking in the world. (Full disclosure: I went to USC!)

Click here for my previous post comparing salaries of coaches at these same universities.

Alabama, knocked the lights out of Georgia--I watched the first half with sheer amazement. Strictly as a football game, the best one I have watched thus far this season.

UniversityAcademic Rank--USWorld RankAcademic-Based Rank
AP Rank

Sep 28
1GeorgiaGroup 55-70Group 102-15010
3Ohio State41618
4OklahomaGroup 118-140Group 305-40219
6LSUGroup 89-117Group 203-30413
7MissouriGroup 89-117Group 203-30413
8West VirginiaGroup 141-166Group 403-510*24
Not ranked
9ClemsonGroup 118-140Group 305-40219
Not ranked
11AuburnGroup 118-140Group 305-40219
13KansasGroup 89-117Group 203-30413
14Texas TechGroup 118-140Group 305-40219
15Virginia TechGroup 71-88Group 151-20211
16Arizona State53969
Not ranked
17BYUGroup 118-140Group 305-40219
18TennesseeGroup 71-88Group 151-20211
Not ranked
Not ranked
20OregonGroup 89-117Group 203-30413
21South FloridaGroup 89-117Group 203-30413
22Penn State32435
23Wake ForestGroup 89-117Group 203-30413
Not ranked
25Fresno StateUnrankedUnranked???

When two clueless politicos meet!

As a kid, I remember how a few politicians in other countries caught my attention. Moshe Dayan, Zulfikhar Ali Bhutto, Olaf Palme, to name a few. Bhutto, in particular, because I believed that he was the only hope we had in bringing about peace between India and Pakistan. So, it was interesting to read in Time that:
Pakistanis are fond of recalling an apocryphal 1963 exchange between John F. Kennedy and Zulfikar Ali Bhutto — father of slain prime minister Benazir, to whom Zardari was married. Impressed by the then Foreign Minister, who would become prime minister before being deposed by a U.S.-backed military dictator in 1977 and later executed, Kennedy is alleged to have said: "If you were an American you would be in my cabinet." Bhutto is alleged to have answered, "Be careful Mr President, if I were an American, you would be in my cabinet."
Well, those were the old days, when politicians knew what they were up to, and up against. And, smart enough for repartees. What a pathetic contrast to that is the following from the same Time story (Note: it is all the more awful because Zardari has a playboy reputation!)
What Zardari said after shaking Palin's hand will likely prove a great deal less memorable. "You are more gorgeous than you are on [television]," he told Palin after she declared she was honored to meet him. "Now I know why the whole of America is crazy about you," Zardari added, flashing his trademark teeth-baring smile.
At this point, the two were urged to shake hands again, presumably for the benefit of the cameras. "I'm supposed to pose again," Palin said quietly. Pointing toward the aide that prompted them, Zardari said, "If he's insisting, I might hug."

Saturday, September 27, 2008

Love and marriage, in India

India is changing, and rapidly too. Naturally, this is reflected in marriage as well. My marriage to a non-Hindu was a pretty big deal years ago. I don't think such issues matter that much anymore. Since my marriage, here is the listing of a few "non-traditional" ones (out of the eight younger cousins):
  • Male cousin married a non-Tamil/(not Brahmin too?)
  • Female cousin married a non-Tamil (not Brahmin too?)
  • Female cousin divorced--a first in the family
  • Female cousin married a non-Tamil-Christian
Four of the eight--50%--have stepped outside the traditions, even though only one out of these is outside India. The rest live in India, and all are professionals. So, all the more for me a reason for me to think that this writer in The Hindu is on to something:
[Let] us take a look at the “New Indian”, a recently emerging metropolitan creature who is perfectly happy to live in India, warts and all. Even if an overseas work assignment is sought it is more for the experience, the independence away from the family and for enhancing the résumé than for leaving the homeland for good. Apparently, the grass is green enough on this side. Paav baji and masala dosa are as much enjoyed as pizzas and hamburgers; Kumbakonam degree coffee as much as Cappuccino; tender coconut water as much as energy drinks; Shah Rukh Khan as much as George Clooney; the salsa as much as the garba; Art of Living as much as Stephen Covey. In other words, the New Indian does not reject India and Indian. Other things from other parts of the world just get added on. The New Indian’s patriotism is not of the jingoistic, chest-beating variety. Being an Indian is just a fact of life. It’s who s/he is. It doesn’t need to be cried out from the rooftops, nor does it need to be a well-guarded secret.
The New Indian is more pan-Indian in perspective, perhaps on account of leading a more mobile life. Born in Ludhiana, educated in Kolkata, MBA from Lucknow, working in Chennai and married to a Hyderabadi is no longer an exceptional scenario. The New Indian does not make a big deal about language; it is seen as only a tool for communication and no longer defines identity. The New Indian lives life more consciously. As a result, relationships are more emotionally intense and personal experiences more meaningful. However, the New Indian is also impatient, brash and in-your-face. Frustration tolerance is poor. Instant gratification is demanded and the tendency towards impulsive decision-making is high.

What we've got here is failure to communicate

To remember Paul Newman, here are the final few minutes from Cool Hand Luke, which includes the immortal movie line, "What we've got here is failure to communicate"--a line that is applicable to many, many situations in real life too

Economists disagree on the $700bn bailout

When economic conditions turn sour in Argentina or Indonesia, we give very clear instructions on what to do: balance the budget, cut government employment, maintain free trade and the rule of law, and do not prop up failing enterprises. Opponents of free markets argue that this advice benefits international financiers, not the domestic market. I have always believed (at least since I began to understand economics) that the U.S. approach was correct. But when the U.S. ignores its own advice in this situation, it reduces the credibility of this stance. Rewriting the rules of the game at this stage will therefore have serious ramifications not only for people in this country but for the future of global capitalism.

That was University of Chicago economist Robert Shimer in a lengthy email that Greg Mankiw has posted in his blog.

Brad DeLong has a different thought:

To get get a $500B macroeconomic gain in production and employment, Paulson wants to take on a position with an expected value of -$100B. But the true value of that position could be anywhere between +$200B and -$400B. Looks like a good
bet to me.

These two comments by themselves ought to tell us that economics is far from being a science. It is a discipline in which arguments and debates are the key, and not any indisputable facts and theories. If only economists would recognize that!

Finally, how about this following comment by Shimer:

let me be clear that I agree with your comments about Ben Bernanke. I too know him well from the seven years I spent with him on the faculty at Princeton and I share your respect for his intelligence. I also recognize that he is far better informed about the current situation than I am. This does not, however, mean that he is perfectly informed. Indeed, looking back over the last 13 months, it should be clear that the Fed and Treasury have repeatedly underestimated the extent of the problem. In such an environment, the distributed knowledge of professional economists and other imperfectly-informed observers may be superior to the knowledge of the Fed staff. In other words, you write, "In his capacity as Fed chair, Ben understands the situation, as well as the pros, cons, and feasibility of the alternative policy options, better than any professor sitting alone in his office possibly could." That may be correct, but I am not convinced that he understands the situation better than the collective wisdom of all professors.

Friday, September 26, 2008

Explaining "short selling"--the power of Web2.0

The fantastic aspect of Web2.0 is clear in videos like the following--where anybody with content knowledge is now able to deliver it to a mass audience using multimedia and completely bypassing the mainstream media. If only we in academia would adopt such practices and make our lectures more interesting and accessible, instead of it being restricted to "closed doors" and with 19th century pedagogy!

The end of laisser faire capitalism?

As we learnt from Francis Fukuyama's "The End of History", and later from John Horgan's "The End of Science?", it is not a good idea to talk about the end of anything, I guess. But, "the end of X" always works as an attractive title though, as this piece from the Financial Times shows. But, don't be fooled by the title--some pretty neat observations there. A few excerpts:
Europe is headed towards the end of laisser faire capitalism. Nicolas Sarkozy is only the latest leader to toll the bell on principles that have delivered, over the past 30 years, unparallelled global prosperity – and now a tremendous bust. “The all-powerful market which is always right is finished,” said Mr Sarkozy. Even Hank Paulson, former Goldman Sachs boss, has said “raw capitalism is a dead end”.
Before everyone dons Mao suits, however, it is not clear how raw that capitalism really was. The economic freedoms of the recent past were more of a tremendous party than a defendable principle, fuelled by cheap credit and state support.

That cheap credit and extensive state support is what has come back to bite us big time. I can imagine that the left will use this to bolster their argument that more state intervention (regulation) is needed, and the right will argue that too much of state intervention was why the markets got it so wrong. I tell you, ne'er the twain shall meet!

Ralph Nader and the "Obama girl"?

I want your money

The latest issue of the Economist has a cover graphic that says it all :-)

Excerpt from the lead article:

Spending a sum of money that could buy you a war in Iraq should not come easily; and the notion of any bail-out is deeply troubling to any self-respecting capitalist. Against that stand two overriding arguments. First this is a plan that could work (see article). And, second, the potential costs of producing nothing, or too little too slowly, include a financial collapse and a deep recession spilling across the world: those far outweigh any plausible estimate of the bail-out’s cost.

Interestingly, Paulson is "caped" in this Daily Show satire too :-)

Thursday, September 25, 2008

(Big) Brother, can you spare me a dime?

A month ago, I blogged about the big three automakers pushing for subsidies from the feds. Well, they have it, and Rick Newman explains the 25 billion dollar gift check from us, the taxpayers. It gets worse; Newman writes that "There's more aid coming. This year's $25 billion is just a down payment. The automakers now plan to ask the government for another $25 billion in loans next year. It's just spare change, after all."
(via Megan McArdle)

Ralph Nader warned about derivatives

It was way back in the mid-1990s, I think, that I went to listen to Ralph Nader. This was in California--in LA. I had expected him to talk in the language of us mortals about corporations, environment, labor, .... Instead, he went all technical and it felt like I was in a graduate-level economics course. His focus was on derivatives and how they were being abused by Wall Street financial experts. The audience, not too large to begin with, almost fell asleep. But, it turns out that, as always, Nader was on target.
Unfortunately for him and for us, nobody paid any attention to Nader.
Then Enron happened. And even then nobody paid attention to the complexities in derivatives that these MBAs were concocting. The traders, on the other hand, started coming up with even more crazy schemes to essentially gamble with other people's money.
When Bear Sterns tanked last March--six months ago--that apparently still didn't wake up those who were supposed to safeguard the "public interest."
Oh well .... I guess I should feel better that if Congress passes a 700-billion dollar bailout, I will literally own a share of America's real estate--more than my own home that we pay for with blood, sweat, and tears!

9/26 update: Nader has a terrific commentary at Cockburn's Counterpunch. His postscript there is something that the "investor nation" should pay attention to:
Shareholders also have some work to do. They should have listened when Warren Buffett called securities derivatives a "time bomb" and "financial weapons of mass destruction.” The Wall Street crooks and unscrupulous speculators use and draining of “other people’s money” out of pension funds and mutual funds should motivate painfully passive shareholders to organize to gain greater authority to control the companies they own. Where is the shareholder uprising?

Nasty comments and learning experiences

First a dietitian propounding on economics, now a geography teacher. SJ editors, staff and apparently college teachers haven't a clue what economics/labor economics is about. ...
Western must be scraping the bottom of the barrel for teachers.

That was a comment to my opinion piece in the Statesman Journal (Sep 25th).
That comment is an example of how NOT to engage in debates and discussions. Such comments are wonderful learning experiences though :-) I often tell my students that in discussions we ought to stay focused on the issues, and should not launch into ad hominem arguments. I can use this as yet another example, I suppose.

So, what was the opinion that attracted such comments? Here it is:

State officials deserve better salaries
I support higher compensation for the governor, legislators, judges and other senior state officials.
The world and the state have significantly changed since Oregon's Constitution was adopted 150 years ago. The dominant economic activities then, for instance, were related to natural resources — farming, fishing, forestry — which also were seasonal. Citizens interested in politics and governance could then set aside time from their professions (if they could afford to, of course).
The issues also were less complicated than they are now. For one, they did not have to be concerned about the problems of most of the population — women and nonwhites, who did not have voting rights until much later. That itself would make the agenda for any government very light indeed.
Further, the much simpler economy meant that it was a limited range of issues that needed any discussion at all. An example will illustrate the point. There was no need
for discussions on a "bottle bill" in the 1870s because, well, there were no soda cans or bottles littered on the beaches and along the highways. Wait, there were no highways then!
In contrast to those simpler "Little House on the Prairie" times, we have a sophisticated economy, and the organization of our economic and personal lives is much more complex than it was even 50 years ago.
So much so that even the successful "bottle bill," which was a landmark legislation hailed all over the world, now needs updating to reflect the contemporary situation.
In a democracy, working on the "bottle bill" and a whole bunch of other issues requires qualified people in all the branches of our government. However, we can't expect, nor require, the legislators, judges or the governor to essentially do this on their time and money, which is what, in effect, low compensation levels imply.
Yes, we need to fix inefficiencies in our government, but the solutions for leaner and more productive government will not automatically happen as a result of low salaries. In fact, it will require higher salaries to attract talented people who can then work toward this important goal.
If compensation is the overriding issue, then perhaps we should watch out for loony proposals to outsource our government (including the governor and legislators) to India, where a few thousand well-qualified Indians will be willing to work for Oregon's minimum wage!
Obviously, higher salaries do not guarantee a better government. We only need to look across at the business world, which is filled with examples such as Enron, whose leaders were highly compensated but failed miserably. But, unlike in the corporate world, we people have the ultimate power after all — the votes to elect or not re-elect officials.
Finally, let us also remember two golden rules. One, the warning that, in a democracy, we get the government we deserve. And second, the marketplace axiom that we get what we pay for.
An outcome when these two rules work together can be disastrous for good government in the 21st century.

Wednesday, September 24, 2008

Paulson a la Nixon, says Samuelson

Paulson's plan would not be the largest government intervention in the private economy since World War II. That distinction still belongs to Richard Nixon's imposition of wage and price controls in August 1971. True, Paulson would socialize unprecedented amounts of private debt, but Nixon asserted control over the entire economy. What's fascinating are the possible parallels between the two episodes, starting with a shared irony: Both came from administrations committed to "free markets."

Robert Samuelson offers an interesting observation, as always. He adds:
The rescue is being constructed so hastily that it may include all manner of flawed provisions: too much power for the Treasury secretary; authority for bankruptcy judges to modify mortgages. Congress faces a wrenching dilemma, imposed on it by financial markets and Paulson. If it dawdles, it may invite the panic that Paulson has brazenly predicted. But if it acts quickly, it may create a monster whose full implications emerge only with time.

Teeth: American white v. British yellow

But what is it about the bright white and perfectly straight teeth of Los Angeles that Americans love - and expect of their public figures?
"Americans have the idea uniformity is equivalent to looking good. The British character is more free-spirited, more radical," says Professor Liz Kay, dean of the Peninsula Dental School in Exeter and Plymouth.
She says Americans aspire to a row of teeth which are absolutely even and white.
BBC News

Tuesday, September 23, 2008

Maria Bartiromo discusses the treasury bailout

With Stephen Colbert :-)

Scholarship and tenure in academe

While tenure allows established scholars to navigate uncharted waters and cross disciplinary boundaries, young scholars still feel that they pay a price for working on the edge of their disciplines. Faculty must obtain tenure in order to gain the freedom to pursue innovative research, yet ironically, the process of acquiring tenure may constrain talented scholars to normative modes of scholarship and pursuits within established paradigms. If the essential value of tenure lies in providing a secure environment for the development of new knowledge and innovation, then our review processes must adapt to changes in scholarship.

Amen! Looks like today I am merely saying amen to posts!!! Read Sylvia Hurtado's essay, and other related essays, in the latest issue of Academe--which is from the AAUP.
Tenure is wonderful, and ought to be protected. But, the process for review for tenure and post-tenure are horribly outmoded. It is way past time for an overhaul.

Life, death, humor, and god

The more we reflect on the pleasures of life, the more we miss the greatest consolation that used to be provided by religious belief: the promise that our lives will continue after death, and that in the afterlife we will meet the people we have loved. As religious belief weakens, more and more of us know that after death there is nothing. This is the thing that makes cowards of us all. ...
Living without God isn't easy. But its very difficulty offers one other consolation—that there is a certain honor, or perhaps just a grim satisfaction, in facing up to our condition without despair and without wishful thinking—with good humor, but without God.
That was the physicist and Nobel Laureate, Steven Weinberg, in the NY Review of Books. Would it be incongruent if I were to say "amen" to this? :-)

Growing instability in Pakistan

Pakistan leaders must act decisively after deadly Marriott bombing, analysts say
If the country doesn't crack down harder on Islamic radicals, analysts suggest, Pakistan could crumble into chaos. LA Times The following is my commentary published in the Register Guard today:
On Aug. 12 a year ago, I wrote that an unstable Pakistan has the potential to cause geopolitical crises beyond our wildest imagination. I wondered whether it would be better if Pervez Musharraf continued as the president of Pakistan, even though he had come to power through a military coup.
Ding, dong, the witch is dead. Musharraf stepped down when the parliamentary majority initiated impeachment proceedings.
Having followed Pakistani politics from a distance ever since I could read a newspaper, I suspected that this would trigger more instability and chaos. While recent developments indicate that I might be correct, being right in this case is, unfortunately, no cause for celebration.
Soon after Musharraf’s exit, the ruling coalition came unglued. The opposition was held together by the focused and singular objective of getting rid of Musharraf. That unifying force no longer exists.
Leading one faction is Nawaz Sharif, whose elected government was the one that was ousted by Musharraf in a military coup in 1999. The other faction is led by Asif Ali Zardari, who inherited the mantle of leadership after his wife, the late Benazir Bhutto, was assassinated. These two leaders and their parties formed the majority in the parliament. But when Zardari became a nominee for president, Sharif took his party out of the coalition.
Zardari won the elections and is the president now. But he may not be well; Britain’s Financial Times reported that he apparently “was diagnosed with a range of serious illnesses including dementia, major depressive disorder and post-traumatic stress disorder.” Who would want this person to be in charge of Pakistan’s nuclear arsenal?
To make things worse, U.S. forces stationed in Afghanistan apparently had President Bush’s approval to go after the Taliban and al-Qaeda in Pakistan — without prior permission from Pakistan’s government. Pakistan’s government, military and media are furious at the unilateral U.S. moves, which seem to undermine the country’s sovereignty.
It was therefore no real surprise when Pakistani military forces recently fired shots to repel American helicopter and ground forces. The only good news here is that the shots were fired in the air as warning. But Pakistani military officials are clear about what could happen: “In case it happens again in this form, that there is a very significant detection, which is very definite, no ambiguity, across the border, on ground or in the air: open fire.”
Meanwhile, al-Qaeda sympathizers and other militant fundamentalists have seized upon the political confusion as an chance to remind everybody of the havoc they can unleash. Take the horrific truck-bomb explosion at the Marriott hotel in Islamabad — just a few hundred yards from the prime minister’s house, where government leaders were dining after the president’s parliamentary address. I shudder to think what might have happened if the truck bombing had happened at the prime minister’s house.
The world has gained nothing from Musharraf’s exit. In addition to triggering geopolitical complications, Musharraf is now completely off the hook and is not bound to answer the question that has dogged us for seven years: “Where’s Osama bin Laden?” Musharraf is the one person who the world suspects has an idea of the whereabouts of bin Laden and his deputies.
Second, with his exit, Musharraf does not have to clarify to anybody how much he was involved in nuclear proliferation.
Recently, in the German publication Spiegel, the wife of the man called the “father of
Pakistan’s nuclear bomb” claimed that Musharraf and his military minions orchestrated the spreading of nuclear know-how to other countries, including
Libya and North Korea. Alas, we will never find out what Musharraf knew and when
he knew it.
It just boggles my mind that the entire world has stood by practically waiting for such events to unfold.
It is more than a mad, mad, mad, mad world.

Sunday, September 21, 2008

Bailout is a "financial coup d'etat"

Earlier I blogged about the economic martial law that is now governing us. Well,:
[Here] is the truly offensive section of an overreaching piece of legislation:
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
This puts the Treasury's actions beyond the rule of law. This is a financial coup d'etat, with the only limitation the $700 billion balance sheet figure. The measure already gives the Treasury the authority not simply to buy dud mortgage paper but other assets as it deems fit. There is no accountability beyond a report (contents undefined) to Congress three months into the program and semiannually thereafter. The Treasury could via incompetence or venality grossly overpay for assets and advisory services, and fail to exclude consultants with conflicts of interest, and there would be no recourse. Given the truly appalling track record of this Administration in its outsourcing, this is not an idle worry.
Nouriel Roubini does not think it passes the smell test:
`He's asking for a huge amount of power,'' said Nouriel Roubini, an economist at New York University. ``He's saying, `Trust me, I'm going to do it right if you give me absolute control.' This is not a monarchy.''

From Naked Capitalism, via Greg Mankiw. Mankiw also points to this one from Luigi Zingales:
The decisions that will be made this weekend matter not just to the prospects of the U.S. economy in the year to come; they will shape the type of capitalism we will live in for the next fifty years. Do we want to live in a system where profits are private, but losses are socialized? Where taxpayer money is used to prop up failed firms? Or do we want to live in a system where people are held responsible for their decisions, where imprudent behavior is penalized and prudent behavior rewarded?

Recession and unemployment

When your neighbor loses his job, it is a downturn in the economy. It is a recession when you lose your job, and a depression when an economist loses his job. That is a standard joke in economics on how these terms are used. It is a joke that quickly highlights the rather arbitrariness when it comes to how these terms are used.

It certainly is looking and feeling more and more like a nasty recession. Of course, economists are yet to lose their jobs in huge numbers, which means the current economic situation is far from being a depression.

From the Economist:
America’s jobless rate hit 6.1% in August, up from 4.7% a year earlier, and within spitting distance of its peak of 6.3% during the previous recession after the dotcom bust. ..... A rise in unemployment is a good signal that growth has fallen below potential. Better still, it matches the definition of recession that ordinary people use. During the past half-century, whenever America’s unemployment rate has risen by half a percentage point or more the NBER has later (often much later) declared it a recession. ...

Saturday, September 20, 2008

From bad to worse in Pakistan

A huge truck bomb exploded at the gateway of the five-star Marriott Hotel in Islamabad on Saturday evening, just a few hundred yards from the prime minister’s house, where all the leaders of government were dining after the president’s address to Parliament.
At least 40 people were killed and 100 were wounded, according to The Associated Press. The toll was expected to grow because of reports that many people were still trapped inside the six-story hotel, which was engulfed in flames
. Thus reports the NY Times.

If even a guy like me could have predicted such chaos and instability in Pakistan, I just cannot understand how "statesmen" and "leaders" in powerful countries, including the US, could have made sure such events will unfold. Awful. We are witnessing the beginnings of a total collapse--it is a failing state, but with nukes!!!
I feel terrible for the people who live in the country, and die for no fault of their own. What a tragedy!
A few days ago I sent the following as a potential op-ed to the Register Guard. It already feels old.

On August 12th a year ago, I wrote in these pages that an unstable Pakistan has the potential to cause geopolitical crises beyond our wildest imagination. Therefore, I wondered whether it would be better if Pervez Musharraf continued on as the president, even though he had come to power through a military coup.

Ding dong the witch is dead—Musharraf stepped down when the parliamentary majority initiated impeachment proceedings against him.

Having followed Pakistani politics from a distance ever since I could read a newspaper, I suspected that this would trigger more instability and chaos. While recent developments indicate that I might be correct, being right in this case is, unfortunately, no cause for celebration.

Almost immediately after Musharraf’s exit, the ruling coalition government came unglued. The opposition was held together by a focused, singular, objective of getting rid of Musharraf. There is no longer that unifying force and, as a result, it became a bitter struggle for power.

Leading one faction is Nawaz Sharif whose elected government was the one that was ousted by Musharraf in a military coup in 1999. The other faction is led by Asif Ali Zardari, who inherited the leadership mantle after his wife, the late Benazir Bhutto, was assassinated.

These two leaders and their parties formed the majority in the parliament. But, when Zardari became his party’s nominee for the presidency, Sharif pulled his party out of the coalition.

Zardari won the elections and is the president now. But, he may not be well—Britain’s Financial Times reported that he apparently "was diagnosed with a range of serious illnesses including dementia, major depressive disorder and post-traumatic stress disorder in a series of medical reports spanning more than two years." Would
anybody want this person to be in-charge of Pakistan’s nuclear arsenal?

Meanwhile, Al Qaeda sympathizers and other militant fundamentalists have seized this political confusion as an opportunity to remind everybody of the havoc they can unleash. Suicide attacks and other forms of violence have increased, according to published reports. A week ago, one suicide bombing in the northwest killed 33. To complicate matters, neighboring Afghanistan and Kashmir are experiencing a new round of violence and death.

To make matters worse, the New York Times reported that American forces stationed in Afghanistan had our president’s approval to go after the Taliban and Al Qaeda in Pakistan—without prior permission from Pakistan’s government. The government, military, and the media in Pakistan are furious at America’s unilateral move that seems to undermine the sovereignty of that country.

In such a sequence of events, it was, therefore, not a real surprise when it was reported that Pakistani military fired shots to repel American helicopter and ground forces. The only good news here is that shots were fired in the air as warning, and not directly at American troops.

But, Pakistan is very clear about what will happen the next time they detect American incursion into their territory. The army spokesman said, “in case it happens again in this form, that there is a very significant detection, which is very definite, no ambiguity, across the border, on ground or in the air: open fire.”

The world has not gained anything from Musharraf’s exit. In addition to the geopolitical complications his exit has triggered, Musharraf is now completely off the hook and is not bound to answer THE question that has dogged us for seven years:
“where’s Osama bin Laden?” Musharraf is the one person who the world suspects has an idea of the whereabouts of bin Laden and his deputies.

Further, with his exit, Musharraf does not have to clarify to anybody how much he was involved in nuclear proliferation. Recently, in the German publication Spiegel, the wife of the “father” of Pakistan’s nuclear bomb claimed that Musharraf and his military minions orchestrated the spreading of nuclear know-how to countries, including Libya and North Korea. Alas, we will never find out what Musharraf knew, and when he knew it.

The irony of it all, and perhaps an insult to us Americans, is a report from Pakistan’s Daily Times that one of the two places that Musharraf may go into exile is New Mexico!

“It’s a Mad, Mad, Mad, Mad world.”

Roubini says it is "socialism for the rich"

[The] transformation of the US into a country where there is socialism for the rich, the well-connected and Wall Street (ie, where profits are privatised and losses are socialised) continues today with the nationalisation of AIG.
This latest action on AIG follows a variety of many other policy actions that imply a massive – and often flawed – government intervention in the financial markets and the economy: the bail-out of the Bear Stearns creditors; the bail-out of Fannie and Freddie; the use of the Fed balance sheet (hundreds of billions of safe US Treasuries swapped for junk, toxic, illiquid private securities); the use of the other GSEs (the Federal Home Loan Bank system) to provide hundreds of billions of dollars of "liquidity" to distressed, illiquid and insolvent mortgage lenders; the use of the SEC to manipulate the stock market (through restrictions on short sales).
Then there's the use of the US Treasury to manipulate the mortgage market, the creation of a whole host of new bail-out facilities to prop and rescue banks and, for the first time since the Great Depression, to bail out non-bank financial institutions.
This is the biggest and most socialist government intervention in economic affairs since the formation of the Soviet Union and Communist China. ...
Like scores of evangelists and hypocrites and moralists who spew and praise family values and pretend to be holier than thou and are then regularly caught cheating or found to be perverts, these Bush hypocrites who spewed for years the glory of unfettered Wild West laissez-faire jungle capitalism allowed the biggest debt bubble ever to fester without any control, and have caused the biggest financial crisis since the Great Depression.
They are are now forced to perform the biggest government intervention and nationalisations in the recent history of humanity, all for the benefit of the rich and the well connected. So Comrades Bush and Paulson and Bernanke will rightly pass to the history books as a troika of Bolsheviks who turned the USA into the USSRA.
Zealots of any religion are always pests that cause havoc with their inflexible fanaticism – but they usually don't run the biggest economy in the world. These laissez faire voodoo-economics zealots in charge of the USA have now caused the biggest financial crisis since the Great Depression and the nastiest economic crisis in decades.

Ouch! As one who often blogged appreciating Roubini's warnings, it will not surprise anybody (is anyone reading this? ha!) that I absolutely love this frank criticism.
(I excerpted it from the Guardian)

And a similar opinion from William Greider at The Nation:
historic swindle of the American public--all sugar for the villains, lasting pain and damage for the victims. My advice to Washington politicians: Stop, take a deep breath and examine what you are being told to do by so-called "responsible opinion." If this deal succeeds, I predict it will become a transforming event in American politics--exposing the deep deformities in our democracy and launching a tidal wave of righteous anger and popular rebellion. As I have been saying for several months, this crisis has the potential to bring down one or both political parties, take your choice.
Christopher Whalen of Institutional Risk Analytics, a brave conservative critic, put it plainly: "The joyous reception from Congressional Democrats to Paulson's latest massive bailout proposal smells an awful lot like yet another corporatist lovefest
between Washington's one-party government and the Sell Side investment banks."

Friday, September 19, 2008

The Large Hadron collider, and SEC college football?

Last week I attended the physics event at the University of Oregon--of course, about the Hadron collider in Europe. One of the questions was, "what is the worst thing that could happen at the LHC?". Jim Brau's response was to the point: if the collider doesn't work, that will be the worst thing.

I wonder if we got a taste of it. Apparently a "30-ton transformer used to power cooling stations for portions of the Large Hadron Collider's (LHC) gigantic superconducting magnets failed last Thursday, just one day after the LHC went online."

So, why the college football piece in the title of the post? Bizarre as it sounds, a headline that I read was "Auburn vs. LSU: SEC's early version of the Hadron Collider". It gets even stranger--the analysis employs more physics stuff:
The “Big Bang” you will hear rumble through the night air around 7:45 EST this Saturday will resonate from the epicenter of Jordan-Hare Stadium, not from Switzerland and France.
I’m not a physicist and I know very little about protons, particles, and kinetic energy but if they’re anything like these Tigers, collision is a very appropriate term to describe these two teams when they meet.

BTW, what is a hadron? Here is the explanation.

And, here is a rappin' explanation of the LHC :-)

What for a college education?

At first glance, the earnings uplift looks worthwhile. ... But cracks are appearing in the “graduate premium”. For one thing, it varies immensely by field of study ... men with arts degrees can expect to earn less than if they had skipped university entirely.
Robin Naylor, at Warwick University, has found that the average return to a degree has held up well over the past 20 years, but it has become more variable: the university now matters greatly, as does the degree class. “The penalty for not having a degree is high, but the penalty for getting the wrong one can be even higher,” he says. And Francis Green, of Kent University, has discovered that in 2006 a third of graduates were working in jobs that did not require a degree, up from a quarter in 2001; they earned a third less than those who were using their degrees.
That was from the Economist. I wrote about this in the Register Guard just over a year ago(August 27, 2007), and attracted some nasty attention for writing the following :

Does U.S. oversell college?
A new school year begins soon. I look forward excitedly to meeting new students and re-establishing connections with those who return. But once again, I start the year with the nagging question: Are we overselling higher education?

Growing up in India, it was quite common to run into people with advanced degrees working in unrelated jobs essentially because, well, there were very few positions to match their educational qualifications. Most of the bank clerks I have met in India have degrees in literature or the sciences. During our trip last December, the telephone salesman my father was talking to was happy that he was able to get that job soon after graduating with a degree in mechanical engineering.

Selling phones or working as a bank teller do not require four years of college. So, why the degree?

Two reasons stand out.

First, there's the faith that college is the path toward prosperity, and that therefore everyone needs to go to college. Thus, parents do all they can to ensure that their children attend college. Second, college education serves as a filter for employers who are faced with the daunting task of selecting from among the many, many applicants for jobs. This further reinforces the notion that college degree is important.

Against such a background, I can't help but wonder whether our drive to get more high school students to college is a variation of the Indian blind faith that college degree will lead to economic prosperity. Déjà vu all over again!

Ironically, while we "elders" are focused on getting more high school graduates to college, it appears that practically every student I meet in my university is familiar with the joke about college degrees and jobs - you know, with the punch line, "Would you like fries with that?"

Students are aware that a college degree might not get them a job after all. This reality that students see is a total contrast to, and disconnected from, our focus on college.

Perhaps employers here in the United States use the college degree as a sorting tool just as employers in India do. By demonstrating that they successfully negotiated hazards like me, students implicitly tell prospective employers that they have the requisite skills to do the job. But then all we have done is unnecessarily raise the entry-level educational requirement, when in reality a degree is not really required and a high school diploma would have sufficed.

Studies show that the average life-time earnings of college graduates are significantly higher than those of high school graduates. But the studies do not seem to account for the possibility of inflated requirements of educational qualifications.

Further, if the recent preoccupation with outsourcing is what is driving us to focus on college, that is all the more the reason why we ought to focus on jobs that cannot be outsourced, many of which do not require a degree. Plumbing, auto repair and caring for the elderly cannot be outsourced to India. Here again, we are all too familiar with the complaints about how expensive plumbers are, or how difficult it is to find people who can help with the rapidly growing elderly population. Yet we choose not to steer more youngsters into such lucrative careers because we are fixated on college degrees that don't always guarantee jobs.

In India, too, there are boundless opportunities for people interested in plumbing, caring for the elderly and other occupations that don't require college diplomas. Urban India is increasingly short of such help. Samad, the plumber on whose services my parents rely, has become so successful that he has made a career change and is now a real estate agent. Samad did not even complete the eighth grade, a total contrast to the newly graduated mechanical engineer selling telephones.

Of course, university education is not merely about economic productivity. It is also to develop a culture of learning and an appreciation of various aspects of life. Personally, I am immensely thankful for the opportunity that I have to pursue learning as my vocation. But at a huge cost to the youth, are we incorrectly advocating that college education is the only avenue for individuals to be economically productive?

Footloose economy, version 2.0

[A] new phase in the evolution of the multinational corporation ... At first companies set up overseas sales offices, to watch over the export of goods made at home. Then they built small foreign replicas of the mother ship, to cater to local demand. Today the goal is to create what Sam Palmisano, the boss of IBM, calls the “globally integrated enterprise”—a single firm in which work is sourced wherever it is most efficient.

The Economist leads off with the article, from which I have excerpted the above, and leads us on to the special survey on globalization. All the more that we need to understand that the footloose economy is here to stay. The magazine adds:
It is true that multinationals tend to shop around for taxes, but in other ways they are usually sticklers for good behaviour. ...
A globally integrated firm cannot allow corrupt practices by employees in some countries and not others, so it must outlaw them everywhere. On the other hand, it cannot enforce religious practices and holidays, or different ways of life, so it must preach tolerance. One investment bank, for example, is extending its lesbian, gay, bisexual and transgender network to its Indian operations over the opposition of its local boss.

Interesting how multinationals in the 21st century can be messengers for liberal ideas that the left values--the same left that doesn't quite like multinationals.

But, here is the deal: the new version of multinational corporation promotes the idea of global citizenship--people see themselves not as part of a "nation", and citizen of a country, but as multinational individuals. I can relate to that idea. But, we also know how toxic this idea became in the campaign for the presidency. I hope we will slowly walk away from the narrow views that promote the us-versus-them attitudes. On that note, this post will end with another excerpt from that same Economist piece:
Chairman Yang Yuanqing of Lenovo, who has moved his family to North Carolina to deepen his appreciation of American culture, so as to help him integrate his Chinese and American workers. Or Lakshmi Mittal, the London-based Indian boss of Arcelor Mittal, who says his multinational team of executives get on so well that he forgets there are different nationalities in the room, and who believes his firm has no nationality, instead being “truly global”.
Lenovo and Arcelor Mittal are at the leading edge of a new phase in the evolution of the multinational corporation

Thursday, September 18, 2008

US will need a trillion dollar bail-out

It is true that the US government has very deep pockets. Privately held US government debt was under $4,400bn at the end of 2007, representing less than 32 per cent of gross domestic product. This is roughly half the debt burden carried by most European countries, and an even smaller fraction of Japan’s debt levels. It is also true that despite the increasingly tough stance of US regulators, the financial crisis has probably already added at most $200bn-$300bn to net debt, taking into account the likely losses on nationalising the mortgage giants Freddie Mac and Fannie Mae, the costs of the $29bn March bail-out of investment bank Bear Stearns, the potential fallout from the various junk collateral the Federal Reserve has taken on to its balance sheet in the last few months, and finally, Wednesday’s $85bn bail-out of the insurance giant AIG.
Were the financial crisis to end today, the costs would be painful but manageable, roughly equivalent to the cost of another year in Iraq. Unfortunately, however, the financial crisis is far from over, and it is hard to imagine how the US government is going to succeed in creating a firewall against further contagion without spending five to 10 times more than it has already, that is, an amount closer to $1,000bn to 2,000bn.

When Ken Rogoff writes thus, I can only exclaim OMG!

Our "cartoon" economy

Will governments in the 21st century be only nightmares?

The Web doesn't bridge divisions; it multiplies and sharpens them. It doesn't build consensus or national coalitions; it grows factions. Truth be told, the Web doesn't network people at all--it lets them network themselves, which is quite different. The Web is the place where people can roll their own, and given that freedom, people tend to coalesce in relatively small, insular groups.
The real genius of the Web, in short, is that it lets people disconnect.

I agree with the author here. There is a good chance that people from the left and right of the political spectrum will agree with the author--even though the observation comes from Peter Huber with the Manhattan Institute. So, here is the irony: Most people left of the political center would not even know about this observation because they don't bother to listen to anything from the Manhattan Institute. If The Nation were to make a valid observation, there is a good chance that the people from the right would not have heard it at all. (All these are restatements of the old philosophical question, if a tree falls in a forest ....)

If Huber is on the right track, and I think he is, then we will not see any "uniter" anymore. Bush couldn't do it. Obama says he will, but I doubt it.

I suppose the political system in the US is not compatible with the multiplication of factions we see, more so thanks to the internet. On the other hand, such divisions will work well with parliamentary systems that have a gazillion political parties, and with proportional representation.

In any case, we are then looking at governments that won't be able to push any big agenda items. Which also means that we might never be able to undo any of the irresponsible policies from the past--we will be stuck with them forever.

21st century government seems to be more of a nightmare.
Thanks to Peter Gordon for the link to Huber's commentary.

Anti-intellectualism in American politics

Q: How does the anti-intellectual presidency undermine democracy?
A: At the heart of democracy is the idea that citizens make civic decisions based on information. When presidents do not offer information, but instead offer only sound bites, platitudes, and vacuous slogans, citizens are ill-equipped to make those decisions. Even worse, they are persuaded to make decisions according to nonrelevant, tangential cues such as personality and partisan punch lines.

Q. Why do presidents generally prefer to appear less intellectual than they are?
A: Presidential communication these days is more about the insinuation of meta-messages, not what is actually being said. And the meta-message is authenticity. When presidents or candidates dumb down or oversimplify, they are essentially employing a rather insidious method of argumentation that goes something like this: "Never mind what I am saying, but know that you can trust me because I am like you. And because I mimic you, I must therefore be for you."

Q: Why do you date the birth of the anti-intellectual presidency to 1969?
A: In 1969, Richard Nixon created a White House speechwriting office, which in effect severed the functions of policy advising and speechwriting.

Read the rest of the answers from Professor Elvin Lim at the Chronicle of Higher Education.

Anti-science attitudes keeping Africa poor

Speaking before a keynote lecture tonight to the British Association for the Advancement of Science, of which he is president, Sir David said that the slow pace of African development was linked directly to Western influence. “I'm going to suggest, and I believe this very strongly, that a big part has been played in the impoverishment of that continent by the focus on nontechnological agricultural techniques, on techniques of farming that pertain to the history of that continent rather than techniques that pertain to modern technological capability. Why has that continent not joined Asia in the big green revolutions that have taken place over the past few decades? The suffering within that continent, I believe, is largely driven by attitudes developed in the West which are somewhat anti-science, anti-technology - attitudes that lead towards organic farming, for example, attitudes that lead against the use of genetic technology for crops that could deal with increased salinity in the water, that can deal with flooding for rice crops, that can deal with drought resistance.”
That is from Professor Sir David King, as reported in the Times. Sir David was the British government's Chief Scientific Adviser until last December. (Via aldaily) He then adds:
The problem is that the Western-world move toward organic farming - a lifestyle choice for a community with surplus food - and against agricultural technology in general and GM in particular, has been adopted across Africa, with the exception of South Africa, with devastating consequences.

I wrote about some of these issues in an op-ed in the Register Guard (April 27, 2008). In that, I wrote: Let us not forget that food is a vital component of world peace. Here's hoping that we will soon launch Green Revolution, version 2.0.

Wednesday, September 17, 2008

An economic martial law in the US?

George W. Bush and Dick Cheney have not, as far as anyone can tell, been steering the ship. According to The Wall Street Journal, Bush was briefed on the rescue after it was in play. And even then, he was only "briefed." There's been no effort on the part of the White House to even advance the idea that Bush is an engaged participant who's actively signing off on these actions, possibly because suggesting his involvement in a crisis of this complexity would cause the stock market to run and hide in a corner.
Congress, too, has been cut totally out of the loop. The AIG bailout -- in fact, all of the bailouts -- have been conceived entirely without their involvement. Indeed, the Federal Reserve and the Treasury Department have been acting, over the course of this crisis, as if they are the sum total of the government. And that may be the correct approach: Neither the president nor the legislative branch possess the expertise or speed to be involved in the real-time crisis management that Bernanke and Paulson are trying to manage. They could, presumably, reverse decisions after the fact or change the contours of the law, but for now, the ship is being steered by the Chairman of the Federal Reserve, the Treasury Secretary, and an informal working group of Wall Street CEOs and banking powerhouses. And the government, as we normally think of it, has basically accepted their temporary authority. You've heard of martial law? We're currently in a state of market law.

That was EzraKlein Archive The American Prospect via Brad DeLong.

I am not at all ok with the idea that we are under some kind of an economic martial law. Paulson and Bernanke are the economic martial law administrators? There is something in this analysis that bothers me, but I can't quite figure out what exactly that is. Anyway, DeLong responds to that with the following comment:

This is how things have been since 1979--when Carter appointed Volcker to head the Fed, Volcker decided he was going to stop inflation no matter what the cost and would dare anyone else to try to block him, and congress and the president decided that challenging the Fed meant taking responsibility for inflation and thus blame if anything went wrong. Congress and the president occasionally show up to pass tax cuts--and twice, in 1990 and 1993, to take action to try to balance the budget. But otherwise the technocrats at the Fed and the Treasury run things.
This is the Age of Central Bankers.

Certainly not the Age of Aquarius!
But, aren't we granting too much of "war powers", so to say, to Paulson and Bernanke? Of course, they will not misuse it unlike the president who misused the war powers that Congress gave. But, are we putting too much of faith in Paulson, Bernanke, et al? Very troubling. Somehow this does not resonate well with how democractic societies are supposed to respond.
BTW, if we think that Paulson and Bernanke can steer the ship, how come the same people then distrust any form of "management" of the economy? The bottom line seems to be that government should let businesses rake in all the profits--legal and illegal--and not do anything about it. But, the same government ought to steer the economic ship when those same businesses run into icebergs. Aaaaaah!!!

Lies, damned lies, and 'eat locally'?

It's hard to open a magazine without finding an article about a photogenic farmer making handcrafted cheese or a happy family that has reduced its carbon footprint by planting a victory garden. ....
There are consequences, too, for oversimplifying. If we all think in food miles, the answer is obvious: Buy local. But new studies show that in some cases it can actually be more environmentally responsible to produce food far from home.
That is an excerpt from Jane Black's essay on how the press got the idea that food travels 1,500 miles from farm to plate. Worth reading the entire essay.

Students in my summer online class will be all too familiar with this topic because that is the task I gave them for the final 2000-word paper, and I have copied/pasted it here:

The Oxford University Press declared that the new word of the year for 2007 was "locavore", which perhaps you are already familiar with. A true commitment to being a locavore has implications for international trade and transportation.
In order to help you explore the issues, I had put together a few articles--on food miles--as
readings for Week#6, which I am sure all of you have already read a gazillion times!

Your task:
* Carefully, and critically, read the five articles on food-miles.
* Think about related issues from Levinson and the mini-questions/responses.
* Articulate a thesis statement that relates to international trade and transportation. Provide this as the "abstract" in about 50-100 words.
* Develop your abstract with logical arguments, with supporting evidence from any number of materials used in this course. Make sure that you do not write a paper exploring a theme that is not quite central to this course. E.g., do not end up writing a paper on the farmers' market in Corvallis.
* You need to carve out your own thesis idea that relates to "locavore" and international trade and transportation.

More on the United States of Gordon Gekkos

Through the quarter-century in which China has been opening to world trade, Chinese leaders have deliberately held down living standards for their own people and propped them up in the United States. This is the real meaning of the vast trade surplus—$1.4 trillion and counting, going up by about $1 billion per day—that the Chinese government has mostly parked in U.S. Treasury notes. In effect, every person in the (rich) United States has over the past 10 years or so borrowed about $4,000 from someone in the (poor) People’s Republic of China. Like so many imbalances in economics, this one can’t go on indefinitely, and therefore won’t. But the way it ends—suddenly versus gradually, for predictable reasons versus during a panic—will make an enormous difference to the U.S. and Chinese economies over the next few years, to say nothing of bystanders in Europe and elsewhere.
James Fallows wrote this in the Atlantic's January 2008 issue. Why is this relevant in the contemporary economic context? Fallows wrote there that
For China, it has helped the regime guide development in the way it would like—and keep the domestic economy’s growth rate from crossing the thin line that separates “unbelievably fast” from “uncontrollably inflationary.” For America, it has meant cheaper iPods, lower interest rates, reduced mortgage payments, a lighter tax burden.
Still unclear? More from Fallows:
The billions of dollars China pumps into the United States each week strangely seem to make it harder rather than easier for Americans to face their own structural problems. One day, something snaps. Suppose the CIC makes another bad bet—not another Blackstone but another WorldCom, with billions of dollars of Chinese people’s assets irretrievably wiped out. They will need someone to blame, and Americans, for their part, are already primed to blame China back.
So, the shock comes. Does it inevitably cause a cataclysm? No one can know until it’s too late.
Well, does this set up the context well for Daniel Gross' and Tyler Cowen's comments that I earlier blogged about?
Further, the Chinese money is not only one source. There are other foreign investors too. So, when Paulson worries about restoring confidence in the American financial sector, I bet he is equally concerned about making sure that foreigners will continue to pump money into our system. More so when the current account deficit is at 5.1% of the GDP! To quite an extent, our financial health is beginning to resemble that of a stereotypical Third World country!!!

Which is why I am all the more convinced that the subprime mortgage issue was only a symptom of the much bigger problems. Even the problems with all the regular mortgages are symptoms of these larger problems. So, it bugs the crap out of me when pundits who are even less qualified than me on this topic proclaim that we need to address the housing industry issues first. Hello?

Ok, back to working on the syllabi ....

Islamic (Sharia) law in the UK?

ISLAMIC law has been officially adopted in Britain, with sharia courts given powers to rule on Muslim civil cases.
The government has quietly sanctioned the powers for sharia judges to rule on cases ranging from divorce and financial disputes to those involving domestic violence. ...
... Politicians and church leaders expressed concerns that this could mark the beginnings of a “parallel legal system” based on sharia for some British Muslims.
Dominic Grieve, the shadow home secretary, said: “If it is true that these tribunals are passing binding decisions in the areas of family and criminal law, I would like to know which courts are enforcing them because I would consider such action unlawful. British law is absolute and must remain so.” Douglas Murray, the director of the Centre for Social Cohesion, said: “I think it’s appalling. I don’t think arbitration that is done by sharia should ever be endorsed or enforced by the British state.”
That is an excerpt from a Times report. These issues will not go away anytime soon. In fact, we can expect such issues to pop up more and more in continental Europe too. India and many other countries have had a tough time figuring out how Sharia might coexist along with a uniform legal system for all citizens. Before you jump into conclusions, this is neither the clash of civilizations, nor the trigger for THE clash.

Tuesday, September 16, 2008

Are Politicians Failing Our Lobbyists?

We can't blame the politicians. The lobbyists have to stand up for themselves, and they need to find a different politician who will do what they want. Or, should lobbyists cut out the middleman, and start giving the money directly to voters? Or, go the extra step and put corporations directly in office?
Yes, it is an old, but absolutely relevant, satire from none other than The Onion :-)

In The Know: Are Politicians Failing Our Lobbyists?

Drinking coffee is an environmental sin?

My office recently switched from Styrofoam coffee cups to a "bring your own mug"
policy. Sounds like the right idea, but with all the water and paper towels we
now waste on washing mugs, I'm not sure this is a huge net gain for the
environment. What is the "greenest" way to drink coffee around the office?

That question in Slate, and the detailed response from Jacob Leibenluft show how complicated the relationship is between economic activities and impacts on the environment. Being "green" is not as easy as one might think. There are tradeoffs to be made every step along the way.

Of course, one big tradeoff in being "green" is about payraise itself. Why? Hey, a payraise that is above and beyond the inflation rate is nothing but asking for extra money to pay for additional consumption. And, consumption is the trigger for all kinds of environmental impacts--different impacts for different kinds of consumption, of course. Which is why ethicists try to figure out how much we should appreciate soccer moms for their rushing around in their vehicles in order to make lives better for their families, when pretty much everything related to that can be simultaneously identified as contributors for climate change!

If only answers to big questions were simple and beautiful equations like E=MC2 :-)

I love coffee. There are few things that can beat the wonderful feeling when I drink that freshly brewed coffee. Particularly after a good meal. More so with warm brownies topped by vanilla ice cream. Hmmmm ....

Every Madras and Salem has a rich history

When I accepted the job at Western Oregon University, triggering our relocation from California, I told my parents that I would be moving to a place close to Madras and Salem. We chuckled at the inside joke — there is a town called Salem in India not too far from Madras (now called Chennai), in the southern state of Tamil Nadu.

Almost six years after moving to Oregon, I visited Madras. Finally. Coincidentally, it was almost on the very day — Aug. 22 — that marks the anniversary of the founding of Madras in India. Lacking a melodramatic background music for the special event, the best I could do was to hum — in the privacy of my car in which I was the sole occupant — Mel Tormé’s “Coming Home Baby.”

Hey, I couldn’t think of any other song.

The first time I heard about a town called Madras in a state called Oregon was, however, way before the interest in my current job at WOU. It was when the Bhagwan Shree Rajneesh and his followers started gathering in large numbers in nearby Antelope.

For those who may have forgotten the stories, Rajneesh and his assistant purchased a large ranch, which in a matter of weeks became the gathering place for thousands of his followers. The commune swiftly disbanded within a couple of years after it became known that the leaders had engaged in illegal activities of many kinds, including the notorious salmonella poisoning in The Dalles. Rajneesh returned to India after a plea bargain, changed his name to Osho, and died in 1990.

I was tempted to swing by Antelope and look for any remnants of the Rajneesh years. But I suppose I gave in to apprehensions of how this bearded guy with Indian origins would be viewed after all the confusion caused by the presence of a bearded Indian only a couple of decades ago!

I find it fascinating that Oregon’s Madras got its name from the textile color patterns. I wonder if the town’s founders would have thought twice about the name had they known that we never actually called them “Madras shirts,” even though these colorfully patterned shirts are popular not only in Tamil Nadu but all over India. They were simply referred to as “check shirts,” as opposed to the “plain shirts.” I should note here that the cloth itself is rarely manufactured in Madras, but in towns scattered all over Tamil Nadu.

India’s Madras is, of course, a much bigger city than the Madras here. With a population of more than 4 million — more than the population of all of Oregon — Madras is a huge metropolitan area that is gaining power, prestige and prosperity thanks to the rapid growth in the information technology industry.

Meanwhile, Madras has had a name change. The city officially became Chennai in 1996, at a time of political and populist interest all over India to revert the names from the Anglicized spellings and sounds to those in the local languages. However, there is still international recognition of the old name of Madras. In fact, I think it is primarily because of the need for recognition that the University of Madras, which was established in 1857, continues to operate without having changed its name to University of Chennai.

Thanks to the international recognition for Madras, I don’t imagine the world will start referring to the colorful shirts as “Chennai shirts” any time soon. Which means there will be no pressure on Oregon’s Madras to change its name to Chennai, either.

The origin of the name Salem in India is from the local vernacular, unlike the story of the Salem here. Of course, both Salem and Madras here in Oregon have been home to the American Indians for centuries. As much as names in India were Anglicized, many native names here in Oregon also got erased. Otherwise, our capital city would be Chemeketa, as it was once called.

If you feel giddy with excitement or from information overload after reading this, well, now you know how geographers feel every single day!

Published in the Register Guard on Sep 16, 2008