Carmageddon and the Car-Dealer-in-Chief :-)

I was listening to President Obama's remarks on the continuing GM/Chrysler saga when I was driving, and I could not understand why he talked about the government standing behind auto warranties. It felt bizarre. I felt the same way when he talked about weather-proofing roofs in the context of the stimulus bill discussions; remember that?

Thus, I was eagerly looking forward to Jon Stewart's satire, because I was that confident that it was one strangely humorous press conference. The Daily Show did not let me down. But, first, an excerpt from David Brooks' column:

by enmeshing the White House so deeply into G.M., Obama has increased the odds that March’s menacing threat will lead to June’s wobbly wiggle-out. The Obama administration and the Democratic Party are now completely implicated in the coming G.M. wreck. Over the next few months, the White House will be subject to a gigantic lobbying barrage. The Midwestern delegations, swing states all, will pull out all the stops to prevent plant foreclosures. Unions will be furious if the Obama-run company rips up the union contract. Is the White House ready for the headline “Obama to Middle America: Drop Dead”? It would take a party with a political death wish to see this through.

And now, Jon Stewart:

The Daily Show With Jon Stewart	M - Th 11p / 10c
Carmageddon '09 - Lemon Aid
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Bush had an "assassination wing"?

The importance of saving money. Or not!

This is a carbon-starved planet!

A colleague recently returned from a trip to the UK--he was there for the Darwin experience, given that this is the 200th anniversary of his birth, and 150th anniversary of his famous treatise. This colleague was thrilled that it was Darwin's poster everywhere he turned. Which is exactly the way it ought to be. More so in this century, which I am convinced is the century of biology, as much as the 20th century was of physics.

Meanwhile, here in the US? Well, watch this Congressional hearing--yes, at the US Congress--and see for yourself where Darwin might fit :-(

How do you like this nutcase's argument that we are right now carbon-starved!!!
Thanks to the DailyDish for the Youtube link.

The Nazi Swastika: In Eugene and in Lebanon

About a year ago, in an op-ed in the Register Guard, I wrote about seeing a Nazi swatika on a lamp-post by the river/bike path. I was shocked to see that. Of course, I called the city personnel right away, and it was wiped clean.

I was reminded of that when I read this piece by Christopher Hitchens. Hitchens is simply an amazing scholar/journalist/intellectual. Not many of his kind around, unfortunately. He is no arm-chair academic mouthing off from the comforts of the ivy-covered college buildings, but ventures out to the problem areas, like Lebanon (near Israel, not the one here in Oregon!) that he writes about here. He does something though that I know I would not have had the guts to do; Hitchens writes:

Well, call me old-fashioned if you will, but I have always taken the view that swastika symbols exist for one purpose only—to be defaced. Telling my two companions to hold on for a second, I flourish my trusty felt-tip and begin to write some offensive words on the offending poster. I say “begin” because I have barely gotten to the letter k in a well-known transitive verb when I am grabbed by my shirt collar by a venomous little thug, his face glittering with hysterical malice. With his other hand, he is speed-dialing for backup on his cell phone. As always with episodes of violence, things seem to slow down and quicken up at the same time: the eruption of mayhem in broad daylight happening with the speed of lightning yet somehow held in freeze-frame. It becomes evident, as the backup arrives, that this gang wants to take me away.

I am as determined as I can be that I am not going to be stuffed into the trunk of some car and borne off to a private dungeon (as has happened to friends of mine in Beirut in the past). With my two staunch comrades I approach a policeman whose indifference seems well-nigh perfect. We hail a cab and start to get in, but one of our assailants gets in also, and the driver seems to know intimidation only too well when he sees it. We retreat to a stretch of sidewalk outside a Costa café, and suddenly I am sprawled on the ground, having been hit from behind, and someone is putting the leather into my legs and flanks. At this point the crowd in the café begins to shout at the hoodlums, which unnerves them long enough for us to stop another cab and pull away. My shirt is spattered with blood, but I’m in no pain yet: the nastiest moment is just ahead of me. As the taxi accelerates, a face looms at the open window and a fist crashes through and connects with my cheekbone. The blow isn’t so hard, but the contorted, glaring, fanatical face is a horror show, a vision from hell. It’s like looking down a wobbling gun barrel, or into the eyes of a torturer. I can see it still.

Doctor Zhivago, and Lara's Theme

Today's news bulletin reports that the music composer Maurice Jarre died at the age of 84.
A fantastic tune it is that he created in "Lara's Theme". In his memory, here is a clip:

Obama to monitor Facebook for slackers!

A primer on research methods

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Globalisation and trade: world trade shrivels

I blogged earlier that trade limits and recession are a bad mix. Not a blog post per se--it was a newspaper op-ed piece. Along that line of logic, I am not sure if I should be happy that I am right, or if I should worry that I am right; here is an excerpt from the Economist:

Trade is contracting again, at a rate unmatched in the post-war period. This week the World Trade Organisation (WTO) predicted that the volume of global merchandise trade would shrink by 9% this year. This will be the first fall in trade flows since 1982. Between 1990 and 2006 trade volumes grew by more than 6% a year, easily outstripping the growth rate of world output, which was about 3% (see chart 1). Now the global economic machine has gone into reverse: output is declining and trade is tumbling at a faster pace. The turmoil has shaken commerce in goods of all sorts, bought and sold by rich and poor countries alike.

It is too soon to talk of a new protectionist spiral. Nevertheless, errors of policy risk making a bad thing worse—despite politicians’ promises to keep markets open. When they met in November, the leaders of the G20 rich and emerging economies declared that they would eschew protectionism and will doubtless do so again when they meet on April 2nd. But this pledge has not been honoured. According to the World Bank, 17 members of the group have taken a total of 47 trade-restricting steps since November.

Indian students shunning America? :-(

Some time ago, I wrote in an opinion piece that America does not seem to have the shine that once attracted thousands of Indian students. I was, and am concerned about it, because more than anything these students going to other countries is our loss.

Guess what the latest report is? Yes, I have more to worry about! Here is an excerpt from the Chronicle:

The economic crisis in the United States has tarnished the American dream for many Indians, who are opting for university studies and career opportunities at home, the Reuters news agency reported. ....

The Educational Testing Service has reported that the number of Indian students taking the Graduate Record Examinations fell from 74,000 in 2007 to 55,000 in 2008. ....

Even students who have passed the examination are abandoning plans to study abroad due to lack of funds, said Rajiv Ganjoo, head of international education at Career Launcher, a test-preparation company in India. “It is a waiting game now,” Mr. Ganjoo said. “Students are looking at the recession, at how the colleges react to it and how the government reacts to it, before taking any steps,” he added.

“The brain drain has already begun to reverse,” said Mr. Wadhwa. “Now there are many magnets pulling the best talent. Before, the U.S. was where everyone wanted to go.”

Obama, basketball, and the madness

I hate the multimillion dollar business that Division I sports have become. I mean, to such an extent that sports team logos of universities don't even include anymore the "U", which stands for "university" in their names. Even here in the state of Oregon: the University of Oregon goes simply with "O", and its rival, Oregon State University matches that with "OS." As my former neighbor jokes, he was surprised to find out that there are real buildings and people associated with the football team! (notice how athletics have their own domain names that has nothing to do with the "edu" of their universities?!)

So, naturally, I didn't care a shit when the President took time off his schedule to participate in the "March Madness"--another term I have come to dislike. On top of everything else, I agree with this excerpt from a report in the Christian Science Monitor:

USA Today columnist Christine Brennan is taking him to task saying that he “absolutely should have acknowledged” the women’s tourney.

“As the father of two athletic daughters, President Obama should know all about the importance of sports for women and girls,” she writes. “Which is why he should have filled out not only a men’s NCAA tournament bracket but also a women’s tournament bracket in his well-publicized appearance on ESPN last week.”

On the air

She also appeared on NPR this morning to discuss the snub.

“Even if one [tournament] completely overshadows the other, wouldn’t it be nice if the president showed some interest in the one that’s a bit smaller?” she asked

“And for those little girls playing basketball in the driveway, maybe say to them I care about your tournament too,” she said.

Adjectives

She’s got one more gripe with him. He didn’t specify that he was filling out the brackets for the “men’s” tournament.

“Those who don’t use that pesky little adjective — and you know who you are — are acting as if there’s no women’s tournament at all, or it’s so beneath them, it’s not worth mentioning. This is rather silly. It is 2009, after all.”

Paul Krugman's Nobel Prize, and Economic Geography

Though it seems like eons ago, it was just a couple of months ago that Krugman was awarded the Nobel. The day of the announcement (October 13, 2008), I wrote the following to my department colleagues:

hey, this is exciting.

am all the more excited because most of the courses i teach are either directly or indirectly about economic geography .... and krugman was one of the first neoclassical economists to systematically talk about a "new economic geography"

in his book Geography and Trade, krugman writes, "About a year ago I more or less suddenly realized that I have spent my whole professional life as an international economist thinking and writing about economic geography, without being aware of it"

it will be neat if neoclassical economics alters its course thanks to the 1-2-3 punch from Amartya Sen, Joseph Stiglitz, and Paul Krugman. but, maybe that is asking for too much, eh!

Thus, I was looking forward to the special session on Krugman and economic geography that I noticed in the program for the annual meeting of the premier professional organization for geographers--the Association of American Geographers.
But, the session did not live up to its billing. So, after thinking about it for a day or so, I emailed the following to the session organizer, with a copy to Professor Ron Martin:

Dear Professor Maskell:

I was delighted when I noticed in the program a session devoted to Paul Krugman's Nobel Prize for his work in economic geography.

As a member of the geography department in a teaching university, one of the reasons I look forward to the AAG is for the continuing education benefits from attending sessions. Particularly when the demands of teaching require me to spread my intellectual interests across a range of courses. However, for the most part, the session on Paul Krugman did not advance the discussion more than how the Economist summarized it in 1999--almost exactly to the day of the session, ten years ago.

After my comments, I have copied/pasted the article from the Economist, and the word "geographers" is highlighted throughout because of the keyword search I had employed. I remembered that piece because (a) it came at a time that Krugman was rapidly transitioning into a public role, and (b) I have used that many times over the ten years, including in a book review in Professional Geographer.

I found it equally puzzling that the geographer mentioned in that article, Professor Ron Martin, was not one of the panelists. Well, there could have been any number of logistical reasons behind it. But, puzzling nonetheless. Anyway, my thanks to Professor Martin for his observations towards the end of the session when it was opened up to comments from the floor.

Well, even if I did not find the session at a level I initially expected, my thanks to you for organizing this session. I hope that this session will be the beginning of a series of conversations on forging a truly new economic geography that marries the best ideas and methods of economists and geographers.

************
"Knowing your place"
Economist; 03/13/99, Vol. 350 Issue 8110, p92-92, 1p

Economists say they have rediscovered geography. Geographers are interested to hear it. They didn't know they had been away

THE leading light of the "new economic geography" is Paul Krugman, professor of economics at MIT. These days he is widely known for his popular books and magazine columns, where his speciality is to explain economics in straightforward terms while pouring scorn on rival experts such as Lester Thurow and Robert Reich. Mr Krugman is a brilliant writer of economics for non-specialists. Annoyingly, he is at least as good at the real thing. The "new economic geography" has lately been a chief interest, developing as it does from his earlier research in "new trade theory".

It is too soon to say whether this new area of work, like its predecessor, will become a major field of research in its own right. But it is not too early for geographers to be very annoyed that economists are roaming blithely across their land.

In a new paper, Ron Martin, from the geography department at the University of Cambridge, surveys the "new economic geography" with the critical eye of an actual geographer-and makes some interesting points. As will become clear, much of what he has to say applies not just to new economic geography but also to much else of what economic theorists spend their time on these days.

Mr Martin explains that the two main branches of new economic geography-one of them concerned with clusters of activity, the other with regional growth disparities-raise questions that are entirely familiar to geographers.

On clusters, economists start with the idea that centripetal and centrifugal forces are in opposition when firms choose where to locate. The agglomerating forces are "externalities" such as the ability to tap into an established local market for appropriate labour and intermediate goods. The dispersing forces are the costs of congestion, and the bidding-up of prices for land and labour. In models of clustering, transport costs and labour mobility usually have a central role: if transport is cheap and labour is mobile, agglomeration will tend to outweigh dispersal (and the converse).

According to Mr Martin, these and other models "generate a dull sense of deja vu . . . Geographers were busy analysing industrial location in these terms back in the 1960s and 1970s."

Much the same goes for the other sort of models-the kind concerned with convergence (or lack of it) in regional incomes. Again, according to Mr Martin, the economists arrived late for the meeting. Their starting point was the comparatively recent finding that incomes among regions converge more slowly than the standard neoclassical model of growth would predict. (This model embodies diminishing returns, meaning that as you invest more, you get a smaller return-so poor regions should catch up.) New economic geographers are examining the reasons for this slow convergence. Again, Mr Martin observes that their work "merely revives" ideas proposed more than 30 years ago in proper geography.

He goes further. The geographers have not only been there and done that, they have given it up as a fruitless enterprise and moved on. The real problem with new economic geography, they believe, is its obsession with mathematical modelling. The economists sometimes argue that geography came to a halt way back because the mathematical tools of the day were not up to the job. Imperfect competiton features prominently, for instance, and clever maths is needed to deal with it. Now those tools are available-their use in economics pioneered by specialists in industrial organisation and trade-so economists can breathe new vigour back into the lifeless body of geography.

No, not quite, says Mr Martin. It wasn't mathematical backwardness that led geographers away from this approach but the conviction that to rely too heavily on maths was a dead end. Geographers realised that "formal mathematical models impose severe limits on our understanding. Geographers became more interested in real economic landscapes, with all their complex histories and local contexts and particularities . . ."

A specific complaint is that an economist may be happy to use the same model to explain clusters at completely different scales-at the international level, at the scale of core versus periphery within a single economy, among urban concentrations and even within city neighbourhoods. (Yes, that is just like an economist.) Geographers insist that profoundly different processes are at work at different scales. So modern geography is interested in a more "discursive" approach, piling on detail and colour, in "close explication of locally specific and contingent factors", in building models from the bottom up, not from the top down.

Mr Krugman's response is robust. The geographers are often simply anti-model, anti-quantitative, anti-clarity, he has written. The geographical literature uses terms likes post-Fordism-even Derrida gets a look in-and Mr Krugman finds that very off-putting. (So does this column, it must be said.) Mr Krugman's general defence of maths in economics, and his strictures on using it properly, seem right: economic statements are based on models, he has argued, whether you acknowledge their existence or not. Better to know the model you are using, if only to understand its limitations, than to kid yourself you have moved to a deeper, model-free plane. Quite so.

Yet who can deny, as the geographers complain, that at the frontier of research, abstract economic modelling and the real world have moved dispiritingly far apart? A meeting of minds ought to be possible: a middle ground between bottom-up and top-down. One day, maybe, but tempers will have to cool first.

The article by Mr Martin is "The New `Geographical' Turn in Economics", Cambridge Journal of Economics, January 1999. Among Mr Krugman's many writings on the subject are "Development, Geography and Economic Theory" (MIT Press, 1995).

Joke of the day :-)

A linguistics professor was lecturing his class one day.

"In English", he said, "A double negative forms a positive. In some languages, though, such as Russian, a double negative is still a negative. However, there is no language wherein a double positive can form a negative."

A loud voice from the back of the room piped up, "Yeah, right."

Pretty cool, eh! From The Telegraph, via aldaily.com

Kafka Airport, and Dostoevsky Hotel the world's worst!

Again and again I am just amazed at how the people at The Onion continue to generate awesome pieces like this one. I almost spilt the coffee, thanks to a LOL moment, when the "newswoman" reported that guests at the hotel killed another guest.
And throughout the video, the references to "kafkaesque" images and words. Simply awesome.
It would have been a fantastic experience to have been fellow students when these Onion people were in college. Wait, maybe there are this good because they did not go to college? As Twain put it, they did not allow college to stand in the way of their education? :-)

Prague's Franz Kafka International Named World's Most Alienating Airport

The life that was :-(

Longer school year not a panacea

Like most people in these United States, I believe that our public school system, and our higher education system as well, needs continuous overhauls to ensure that our youth will have fantastic futures.

Therefore, I followed with immense interest President Obama’s recent speech on education; I liked many aspects of it. However, I am not quite in agreement with the president’s observation that one way to get our children ready for a productive and engaged life is by lengthening the school year.

Obama compared our academic calendar with South Korea’s, noting, “Our children spend over a month less in school than children in South Korea — every year. That’s no way to prepare them for a 21st century economy.”

A longer school year is not a necessary condition for success in the 21st century. It was not even a good model for the 20th century, which is when I was a student in a school system that has some of the longest school years.

As I look back at my childhood, it seems as though I was always in school. In the southern part of India, where I grew up, the academic year began in early June, and we had classes six days a week. It was a huge reward when we had the second Saturday of every month off — and, boy, did we look forward to that two-day weekend!

School ended in mid-April, in time for the peak summer heat, when we kids then spent our time climbing the mango and tamarind trees and playing cricket and football, darkening our already naturally tanned complexions.

Yes, the school system graduated quite a few successful students. But then, in a country with a population of more than a billion now, even a small percentage translates to hundreds of thousands of successes.

Later in life, as a parent here in America, I was excited by the educational system that my daughter went through — in a public school. I would have way preferred to be a student here than in India. And it was not at all because of the five-day school week or because of the long vacations.

I was blown away by a number of wonderful aspects of schooling here: from “learning by doing” to physical education to arts and music to student government. In contrast, I went through a system that emphasized learning by rote, not learning by doing. Music and the arts had only token representation in the curriculum, and we certainly did not learn civic responsibility through student government.

What ultimately mattered to me as a parent was not the length of the school year, but what went on when school was in session. Equally important, on weekends and during summers, kids are able to be kids — although like many parents, I sometimes preferred it when the kids were in school, because they can be stress agents at home!

Thus, having experienced two strikingly different systems, the question for me is a deceptively simple one: What is the purpose of education?

The more we begin to explore this question, the more it becomes intensely controversial, because of the profound differences in opinions. We might disagree because of the different weights we attribute to science, social science and language courses. Or how much we think the arts ought to be emphasized in schools.

These immensely controversial issues are precisely the ones we ought to focus on. What if the subjects that were taught in the 20th century will not have any “value” at all in the 21st century? Or what if the way in which we taught a subject in the 20th century will not work in the 21st century?

Furthermore, a child entering the first grade in September 2009 will graduate high school in 2021. I am willing to bet that none of us has any realistic idea of what might be the important issues in this country and the world 12 years down the road.

So, if we are trying to figure out how to prepare this kid to be constructively and productively engaged from 2021 until retirement in 2071, well, let us be honest here: We are all involved in a guessing game about the future.

I don’t have the answers. All I know is that Yogi Berra was, as always, on the mark: “The future ain’t what it used to be!”

I am convinced, however, that longer school years are no panacea for the complexity and uncertainty about the future economy and polity. Merely retaining students in classrooms for a lot more days of the year will not necessarily guarantee that they will graduate as young adults with the ability to successfully negotiate the economic and civic challenges they will face for the rest of their lives.

For The Register-Guard
Posted to Web: Sunday, Mar 22, 2009 11:47PM
Appeared in print: Monday, Mar 23, 2009, page A7

Schooling, creativity, and .... plagiarism?

I was absolutely intrigued by the caption of a column in The Hindu--Creativity and Education: Contradictory Impulses? So, I started reading it, given my own interests in this topic.

Well, the overall tone there seemed to be less original, and more of a convenient paraphrasing of Sir Ken Robinson's much viewed and discussed 20-minute Ted.com talk. (I have embedded it at the end of this post.)

The only "new" idea in Rajivan's column is right at the beginning about cows and amoebae.

When I reached the end, I was simply taken aback that Rajivan would outrightly use Sir Ken's anecdote about a child drawing a picture of god, without attributing the source!

I wonder if the author thought this was kosher; not in the definitions of plagiarism that I tell my students.

The author fails outrightly in trying to convey the argument about creativity and education, and instead comes across as having no original idea--perhaps an example of a lack of creativity on the author's part, on top of the plagiarism ....

Groupthink in Academia: screw the minority opinion :-(

“Generally speaking, we can observe that the scientists in any particular institutional and political setting move as a flock, reserving their controversies and particular originalities for matters that do not call into question the fundamental system of biases they share.”
—Gunnar Myrdal, Objectivity in Social Research

“Perhaps we avoid studying our institutional lives because such work is not valued by our colleagues. The academy is, after all, a club, and members are expected to be discreet. Like any exclusive club, the academic world fears public scrutiny. Research is in the public domain. Outsiders might use what the research reveals against the academy.”
—Richard Wisniewski, “The Averted Gaze”

“The thousand profound scholars may have failed, first, because they were scholars, secondly, because they were profound, and thirdly, because they were a thousand.”
—Edgar Allan Poe, “The Rationale of Verse”

In baseball, fans of different teams can agree on general issues concerning rules, umpiring, and performance evaluation because such matters are separable from support for a specific team. In academia, however, we find that rules and standards for performance are not separable from support for specific beliefs. Ideological sensibilities and commitments in academia tend to be bound up with notions of the whole academic enterprise. Thus, one’s positions on how performance should be umpired or evaluated and one’s support for a certain “team” are not separable.

We think that discussion of ideology in academia is itself bound to be ideological and that good scholarship calls on us to declare that our principal motivation for the present investigation is our belief that, by and large, professors in the humanities and social sciences are weak in certain sensibilities that we ourselves hold. In particular, classical liberalism has few adherents among academics.

Need I say more? :-) Read the entire essay, by Daniel B. Klein, Charlotta Stern, from which I have excerpted the above.
via: Peter Gordon

Nandan Nilekani v. Deepak Chopra

The mustache is the difference; otherwise they look alike?

Guns don't kill people

Manufacturer Recalls Hollow Point Bullets That Fail To Explode Inside Targets

Quote of the day!

Going after Jim Cramer is like trying to fix your marriage by getting new drapes.

That was Megan McArdle.

I suppose we want a punching bag, and we have made available a few of them. Meanwhile, the war in Afghanistan and Pakistan is systematically escalated; social security crisis gets ignored; the youth and the children get stiffed with bills that they are not really responsible for .....

Oh well!

When humans live near leopards' territory ....

From The Hindu:

Three persons sustained injuries when the panicked animal attacked them while being chased by the residents. The leopard too sustained injuries in stone-pelting by residents.

Divisional Forest Officer, Assam State Zoo, Narayan Mahanta told The Hindu that the animal had been kept under observation and was being treated for external wounds caused by stoning. With this the number of rescued leopards in the zoo has gone up to 14.

Difficult task

“Tranquillising the leopard in the open area was really a difficult task as our forest staff had to be fully exposed to the threat of being attacked at any time by the panicked big cat. However, our men displayed courage by taking all risk and successfully tranquillising it,” Mr. Mahanta added.

He said the hills surrounding the city have a sizable population of leopards which often come down to nearby residential areas in search of food, and prey on dogs, goats and chickens at night. They return to their habitat before dawn.

Academic life: worth more than what I get paid for :-)

There are times when I wonder if the academic life is worth it. Hey, I am human with feelings!
And that is when emails like this one (from a student) pep me up .... thanks to that student

[GEOGxyz] was unlike any other class I've had at Western. At times, it was both interesting and challenging. Keep up the good work Dr. Khe!

Wish you well,

The coming benign authoritarianism in India

Over the last couple of years, every time I visited India somebody or the other commented on how I look like Narendra Modi--the chief minister of Gujarat. Sometimes it was just the beard that triggered such a comparison. They thought it was a compliment, and I always had to smile outside but cringe inside! As a visitor, the last thing that I wanted to do was pick a fight on this.

Why cringe? This is a guy who oversaw the worst communal violence when, as Robert Kaplan writes, "More than 400 women were raped; 2,000 people, overwhelmingly Muslim, murdered; and 200,000 more made homeless throughout the state." All in a matter of hours :-( The US government, at least in this context, has done the right thing by denying Modi visa to visit the US.

But, Modi is a popular guy in India. He is one mix of contradictions. In a land of corrupt politicians, Modi is known for high levels of fiscal integrity. A workaholic's schedule he has. Has created a business-friendly environment in Gujarat. Has a reputation for being an authoritarian leader. And, yes, has a strong anti-Muslim outlook. I was visiting India during his recent re-election. With all the election noise in the background, one television news channel, mimicking the hysterical news shows in the US--more like Hardball--had one of the most bizarre and awful discussions ever. The topic, if I remember correctly, was "All Muslims are not terrorists, but all terrorists are Muslims." Talk about (ir)responsible journalism!

I won't be surprised at all if Modi, or somebody like him, becomes the prime minister really soon. Kaplan echoes the sentiments I have heard all too often in India--both when I was growing up there, and during my recent visits, when he writes:

India’s rise as an economic and naval power has invited frustrating comparisons with China: whereas the authoritarian government in China can make things happen, development happens in India mainly in spite of the government. Hanif Lakdawala told me that, especially because of the nightmarish chaos of Indian cities, “there are some in this country ready to accept a fascist, or at least a very strong dictator.”

Not a fascist, in my opinion, but certainly someone like Modi. As Vimal Ambani, a prominent, liberal-minded Gujarati businessman, told me, “At the end of the day, Modi still offers the best model for governance in India.”

Because, the reality is that most Indians are sick and tired of the lack of governance, and corruption, which they correctly perceive as holding them and the country back from a much more rapid advancement. What good is a right to vote when the choice is between tweedledum and tweedledee and when even water is in shortage, is a typical comment.

I am afraid that the collapse of Pakistan will not only embolden the likes of Modi, but that a larger number of Indians will also prefer that kind of a "stronger" leader. When that happens, Francis Fukuyama can write about why history did not end, and is being re-written!

Photo of Modi: The Atlantic

The failing state of Pakistan

Pakistan might very well turn out to be the crisis that the bumbling Joe Biden said will happen within the first six months of Obama's presidency.

I wonder whether all the people--which includes Obama--who pressed for Musharraf's ouster are ok with the level of chaos and disorder in Pakistan now. No, I am not a Musharraf fan; far from that. But, I did not want him gone abruptly because I worried about the collapse of the state.

Oh well. Nobody listens to me :-)
Photo: BBC

What if China stopped loaning US?

Jim Fallows explained the mechanics of China and the US in a mutually assured destruction-like financial relationship. In this bizarre relationship, if China decides to pull money out the US, both countries lose.
But, at some point China would have to worry about pouring its hard earned money down the American drain. Bloomberg reports on the opening shot; here is an excerpt:

China’s Premier Wen ‘Worried’ on Safety of Treasuries (Update2)

By Belinda Cao and Judy Chen

March 13 (Bloomberg) -- China, the U.S. government’s largest creditor, is “worried” about its holdings of Treasuries and wants assurances that the investment is safe, Premier Wen Jiabao said.

“We have lent a huge amount of money to the United States,” Wen said at a press briefing in Beijing today. “I request the U.S. to maintain its good credit, to honor its promises and to guarantee the safety of China’s assets.”

White House National Economic Council Director Lawrence Summers, asked about Wen’s remarks, said overseas “confidence” in Treasuries would be hurt without the administration’s steps to end the economy’s decline. President Barack Obama is relying on China to sustain buying of Treasuries amid record amounts of debt sales to fund a $787 billion stimulus package.

“China’s purchases of American debt have been one of the few bolts keeping the wheels on the global economy,” said Phil Deans, a professor of international affairs at Temple University in Tokyo. “If China stops buying, where does Obama’s borrowing to fund his stimulus come from?

Change is coming. Soon. And we won't like it.

Gas tax in Oregon

A few days ago, I was reminded of Johnny Carson’s quip, “I did not know that,” when I read that February 25^th was a special 90th anniversary for Oregon—in 1919, Oregon became the first state in the union to implement a tax on gasoline sold at the pump.

The tax of one cent per gallon was based on a simple and straightforward idea that those who use the roadways ought to pay for their construction and maintenance. Oregonians did not implement a general tax on the population but, instead, and correctly, directed it only at the users of the service. What a novel idea for that time period, when automobiles were still being thought of as horseless carriages by many in this country and elsewhere!

As automobile usage increased, other states and the federal government also followed up with gas taxes. And, yes, taxes have gone up, largely to keep up with inflation. Now, when we purchase gas in Oregon, the price for every gallon at the pump includes a statewide tax of 43.4 cents, and a federal tax of 18.4 cents. Local governments have the authority to charge additional taxes as well. Of course, there is a comparable tax on other types of fuel too.

It was also in 1919 that Dwight Eisenhower participated in the army’s exercise to study the logistical issues in moving military vehicles and equipment from coast to coast, along the Lincoln Highway. It was this, together with his war-time experiences in Europe, which led Eisenhower to call for a national system of highways when he was elected to the presidency.

The two unrelated events of 1919 continue their influence on us even today, through gas taxes and a complex network of federal and state highways. At the same time, we are also in the middle of intense public policy discussions related to gas taxes, and the conditions of the roadways, which seem to be regressing.

According to the National Surface Transportation Infrastructure Financing Commission, America’s transportation infrastructure is falling apart—sometimes literally. In its report to Congress on February 26^th, the Commission noted that “over half of the miles that Americans travel on the federal-aid highway system are on roads that are in less than good condition, more than one-quarter of the nation’s bridges are structurally deficient or functionally obsolete, and roughly one-quarter of the nation’s bus and rail assets are in marginal or poor condition.”

The report recommends implementing a mileage-based fee system by 2020, with modest increases in federal fuel taxes in the meanwhile in order to get out of “the hole we have dug for ourselves.”

Well, the forward thinking public policy pioneers that Oregonians are, we have engaged in an interesting discussion over the last couple of years on precisely this same idea of charging road users not by the gallons of gas bought but by the miles travelled in the state. Yet again, Oregonians are a few years ahead of the federal government. While that is being debated, our lawmakers are exploring the merits of increasing the gas tax—proposals range from an additional two cents per gallon, to as high as six cents.

However, to a large extent, such discussions are not entirely new. Almost 15 years ago, I was a junior participant in similar policy discussions in my earlier career as a transportation planner in Southern California. Even then, there was very little disagreement on the state of roads and bridges—this was years before the catastrophic bridge collapse in Minneapolis in the summer of 2007, which served as a tragic reminder to those who were in denial about the state of the transport infrastructure in the country.

The intense disagreements were related to the challenging questions of appropriate user fees, while recognizing the need for fairness and the impacts that fossil-fuel based transportation have on air quality and global warming. These are issues that have become a lot more serious over the 15 years.

Thus, after years of deliberations, I am ready for action. Perhaps there could not be a better time than the 90^th anniversaries of the first gas tax and Eisenhower’s transcontinental trip to advance this item as a part of the overall strategies related to the depressed state of the economy. We certainly do not want to wait until the 100^th anniversary of the gas tax!

Cramer v. Jon Stewart :-)

Of course, Stewart wins. I hope he puts an end to these hysterical shows, the same way his appearance and comments on CNN's Crossfire led to that show's demise.
First, the Cramer clip

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And now the clip from the famous Crossfire episode:

Don't get carried away by Tuesday's "Bull Market"

Yes, it was a relief that there was some good news, particularly about Citibank's health, which then led to a huge stock market rally. But, don't get overly bullish--such ups and downs are common in such chaotic conditions, as this wonderful graphic from dshort shows:

One reason for the crisis: MBAs

MBAs are haunted by the thought that the tag really stands for Mediocre But Arrogant, Mighty Big Attitude, Me Before Anyone and Management By Accident. For today’s purposes, perhaps it should be Masters of the Business Apocalypse.

Harvard Business School alumni include Stan O’Neal and John Thain, the last two heads of Merrill Lynch, plus Andy Hornby, former chief executive of HBOS, who graduated top of his class. And then of course, there’s George W Bush, Hank Paulson, the former US Treasury secretary, and Christopher Cox, the former chairman of the Securities and Exchange Commission (SEC), a remarkable trinity who more than fulfilled the mission of their alma mater: “To educate leaders who make a difference in the world.”....

Given the present chaos, shouldn’t we be asking if business education is not just a waste of time, but actually damaging to our economic health?

If doctors or lawyers wreaked such havoc in their own professions, we would certainly reconsider what is being taught at medical and law schools.

Amen!
Read the entire piece in the Times (London). BTW, the author of that commentary, Philip Delves Broughton, is a class of 2006 Harvard MBA, and the author of What They Teach You at Harvard Business School, published by Viking

Thanks to my favorite site: A&L Daily

Nationalizing banks? Please, NO!

I grew up in India, when most of the banks were government owned. The few private banks were way smaller than these government entities. While India is seeking to make these large public-sector banks more efficient, here in the US there are loud calls to nationalize major banks.
Granted that we are in a serious crisis .... but, nationalize? and, yes, I have no expertise in this topic, but I don't think I am that significantly less smart than the elected officials who are expected to make this decision. So, ....

Yet, I was waiting for a real expert to articulate in simple terms the kinds of apprehensions I have on this topic. And, here is Alan Blinder on why nationalizing is not a good idea, even though it worked well for Sweden:

WHERE TO DRAW THE LINE? First and foremost, the Swedish government had to deal with only a handful of banks; we have more than 8,300. Numbers matter, because deciding where to draw the nationalization line isn’t easy. Presumably, no one wants to nationalize all the banks, thousands of which are healthy. But where do you stop, once you start?

Suppose we nationalized four banks. Bank Five would then find itself at a severe disadvantage in competing for funds with the government-backed quartet. Forced to pay higher interest rates to attract depositors and other creditors, its profitability would suffer. Soon, Bank Five might start looking like a candidate for nationalization, too — followed by Banks Six, Seven and so on.

THE DOMINO EFFECT As stock traders began to contemplate the nationalization of Banks Five, Six and Seven, their share prices would tank, and short-sellers might consign the companies to an early grave.

THE MANAGEMENT CHALLENGE The Swedes had a relatively simple task. They never had to deal with institutions of the size and complexity of our banking behemoths.

Mr. Geithner has emphasized that governments are ill-suited to manage businesses. I’d take the point a step further: Overseeing the management of dozens, or hundreds, or maybe even thousands of nationalized banks is a daunting task.

POLITICAL OBSTACLES The process of nationalization and reprivatization went amazingly well in Sweden partly because it was remarkably free of political interference. Would that happen here? You decide. My bet is no.

THE CONFIDENCE QUESTION Finally, because nationalization runs counter to deeply ingrained American traditions and attitudes, there is a danger that it might undermine rather than bolster confidence.

To which Paul Krugman responds:

1. I just don’t understand a lot of what my colleague Alan Blinder wrote. In particular, I don’t understand how the good bank/bad bank solution is possible unless you pump in large amounts of public funds.

You might say, why can’t a bank just split itself, giving the bad stuff to one piece and the good stuff to the other? Because it has to divvy up the liabilities as well as the assets. And if it gives the bad bank (which isn’t solvent) a bunch of the liabilities, this amounts to defaulting on its debts — and the bondholders will sue. So the good bank-bad bank thing seems to implicitly carry the assumption that someone, namely you and me in our capacity as taxpayers, guarantees the bad bank’s liabilities. In which case we are in fact nationalizing the losses, but privatizing the gains.

Well, here is what I think: the bottom line is essentially how much we (taxpayers) absorb the losses, and allow private interests walk away with profits. That is the bullet we need to bite. I am ready to let go of the gains that will flow towards private interests (and see if we can somehow tax them), and just take over the bad debts and get moving. The zombie status will otherwise continue on forever, and make economic recovery that much more a challenge.

So, Obama and Geithner, do what Alexander did to untie the Gordian Knot--take a sword and slice it. In this case, into "good bank" and "bad bank". Don't listen to economics professors for ever--we faculty, in any discipline--love to debate, and we can go on and on without reaching a conclusion.

Congressman apologizes for the extramarital affair

A preemptive strike .... from the brilliant team at The Onion

Congressman Offers Preemptive Apology For Extramarital Affair

Where do you go to my lovely?

This classic by Peter Sarstedt is 40 years old!
BTW, did you know he was born in India?

“We were born in India and we came to England in 1954, just prior to the Rock & Roll explosion” Peter explained. “Our story is, we started off as a skiffle group, then got into Rock & Roll and then split up and had our individual successes in the charts. The Sarstedt Brothers had hits from 1961 to 1976; three brothers having separate hits in different eras”.

Viva Public Scholarship! :-)

I have blogged (particularly here, here, and here) about public scholarship.

However, over the last couple of weeks I have been forced to wonder whether I ought to, instead, play the dirty old publishing game in academe. You know, author papers in academic journals that nobody would read! And I simply hate that game, which is nothing but a farce--at the expense of taxpayers in universities like mine, and I wrote about this too.

Today, a colleague emails me a link to the Christian Science Monitor, along with a note that "this appears to be written for you" ..... I am just simply excited with her note in the first place, and then with the content of the piece in the Monitor.
So, what is that about?
Here is an excerpt:

Suppose that 30 or 40 prominent research universities issued a joint statement, urging their faculty to publish in popular venues – and promising to consider such articles in promotion and salary decisions. Believe me, you'd see more and more professors writing for the newspaper.

To be sure, some faculty would continue to turn up their noses at it. As the historian Patricia Limerick has quipped, these professors resemble the people nobody wanted to dance with in high school; as a defense mechanism, they pretend that they never wanted to dance in the first place.

But I think plenty of academicians would want to dance, if the academy rewarded it. And it would be good for their disciplines, too. These are tough times for the social sciences and humanities, especially, which need to justify their budgets to already-strapped state legislatures and donors. What better way to prove your worth to the public than to write for it?

That is what I am talking about. Or, writing about. Thanks to Professor Zimmerman.

Stock markets will be down on Monday, Tuesday, ...

I will be surprised if they don't--after strong opinions like this:

John McCain and Richard Shelby, two high-profile Republican senators, said on Sunday that the government should allow a number of the biggest American banks to fail.

“Close them down, get them out of business,” Mr. Shelby, the senior Republican on the Banking Committee, told ABC’s “This Week With George Stephanopoulos.” “If they’re dead, they ought to be buried.”

While the Alabama senator did not say which banks to shutter, he suggested that Citigroup might be on that list, saying the bank has “always been a problem child.”

Mr. McCain, appearing on “Fox News Sunday,” echoed that sentiment without identifying any banks. Mr. McCain, who lost the presidential election last November, also accused the Treasury Department of avoiding the “hard decision” to let “these banks fail.”

And how about this one:

Republican Sens. John McCain of Arizona and Richard Shelby of Alabama said they want the automaker to seek bankruptcy protection, which would allow for reorganization.

"I think the best thing that could probably happen to General Motors, in my view, is they go into Chapter 11, they reorganize, they renegotiate their — the union management contracts and come out of it a stronger, better, leaner and more competitive automotive industry," McCain said on "Fox News Sunday."

Shelby, appearing on ABC's "This Week," said Chrysler and Ford as well as GM belong in Chapter 11 and then could get federal money as part of the process of reorganization.

Meanwhile, the treasury secretary, .... well, read this:

Henry Blodget thinks it is time for Timothy Geithner to go. So far, Geithner's performance has been shockingly unimpressive. It's not as if he's walking into the crisis anew; he's been the head of the New York Fed for years, and dealing with these issues from the very beginning. Yet on the really crucial problem of what to do about the banking system, he's been very nearly silent, going to Congress with a non-plan-plan that terrified the very markets it was supposed to reassure. Blodget also has a point when he says that Geithner has been mysteriously stuck on his original ideas. I would add that he seems mysteriously stuck on them, but not willing to pay the political cost of executing them, which is the worst of both worlds.

On the other hand, though I've so far been underwhelmed by his performance, we can hardly fire him, because who on earth would replace him?

Recession, trade limits don’t mix

I am not surprised at all that the stimulus package has “buy American” provisions in it. I suppose congressional leaders were reflecting the prevailing mood among the U.S. public, and even among most students in my introductory geography course.

My students’ “buy American” discussion was in the context of an assignment they had completed. I had asked them to pick 20 items at random in their apartments and note the countries where they were manufactured. They then had to identify any patterns they observed in the data.

As one would guess, about 50 percent to 60 percent of the goods they owned were manufactured in China. Barely a fifth of their “stuff” was made in the good ol’ USA. Some students were surprised to note that they owned things made in countries they did not even know existed.

The more we discussed the data, the more they seemed to be concerned about goods flooding this country from somewhere else. It didn’t take long before some of these students in an introductory geography class began wondering if we need to protect and encourage “our” businesses and not rely so much on China or other foreign countries.

The “buy American” provisions in the stimulus package reflect these same concerns. The package requires that only U.S.-made goods, particularly iron and steel, be used in public works and building projects that will be paid for by the stimulus dollars. Financial firms that are on government life support will not be able to hire foreign labor, either.

My typical response to students is to rely upon local examples. I ask them whether other countries might feel that importing planes manufactured by Boeing precludes the growth of an aircraft industry within their borders. I ask whether the import of Hollywood films is wiping out other countries’ native movie industry. I ask whether my students would be OK with those countries not buying our movies and planes.

It becomes clear that trade is a way of life, and imports and exports are basic characteristics of modern and successful economies — even during recessions. On the other hand, if countries implement a variation of autarky — the notion that a country should be self-sufficient and not engage in international trade — then the results are unfavorable.

India, during my formative years, practiced a version of “buy Indian” through an elaborate and regulated system of import-substituting industrialization. In this system, it was nearly impossible to get access to goods manufactured in another country. It didn’t matter whether it was chocolate or cement or cars, importing meant extensive governmental red tape and even bribes.

Had India continued down that path, it would not have undergone the economic and technological revolution that it has. The much joked-about call centers would not have been sited in India. Neither would Thomas Friedman have coined the phrase “the world is flat.”

As I have noted in earlier columns, absolute poverty in India has not been eliminated, and many other problems persist. But I am confident that the situation would be worse had India not switched its economic gears from autarky to policies that actively encouraged greater participation in the global economy.

So much to my students’ disappointment, I am not keen on closing our economy, even if only partially, with “buy American” provisions.

Also, the current economic crisis is not merely American but global. We are at a stage where China’s imports have dropped almost by half, and the economic contraction in Japan makes our recession look tame. So I am equally worried that other countries might start imitating America with their own versions of “buy domestically.” It is no wonder then that other key global players, including China and the European Union, already have warned us that they will keep a close watch on American protectionism.

To a large extent, the way out of this recessionary hole is by adopting a global slogan of “just buy, baby,” similar to Al Davis’ old tagline of “just win, baby” in the Oakland Raiders’ heyday. It’s simply unwise to chant, “just buy American, baby.”

Published in The Register-Guard

Appeared in print: Sunday, Mar 8, 2009, page G3

Iceland is a hedge fund. That sounds right.

Iceland was entirely new to his experience: a nation of extremely well-to-do (No. 1 in the United Nations’ 2008 Human Development Index), well-educated, historically rational human beings who had organized themselves to commit one of the single greatest acts of madness in financial history. “You have to understand,” he told me, “Iceland is no longer a country. It is a hedge fund.”

Isn't that a wonderful description of Iceland during its go-go-years between 2002 and 2008? That quote was from this lengthy piece in Vanity Fair.

The article seems so surreal--could such things have really happened? How could the global economy have become such a grand ponzi scheme? I mean, take this excerpt, for instance:

On February 3, Tony Shearer, the former C.E.O. of a British merchant bank called Singer and Friedlander, offered a glimpse of the inside, when he appeared before a House of Commons committee to describe his bizarre experience of being acquired by an Icelandic bank.

Singer and Friedlander had been around since 1907 and was famous for, among other things, giving George Soros his start. In November 2003, Shearer learned that Kaupthing, of whose existence he was totally unaware, had just taken a 9.5 percent stake in his bank. Normally, when a bank tries to buy another bank, it seeks to learn something about it. Shearer offered to meet with Kaupthing’s chairman, Sigurdur Einarsson; Einarsson had no interest. (Einarsson declined to be interviewed by Vanity Fair.) When Kaupthing raised its stake to 19.5 percent, Shearer finally flew to Reykjavík to see who on earth these Icelanders were. “They were very different,” he told the House of Commons committee. “They ran their business in a very strange way. Everyone there was incredibly young. They were all from the same community in Reykjavík. And they had no idea what they were doing.”

He examined Kaupthing’s annual reports and discovered some amazing facts: This giant international bank had only one board member who was not Icelandic, for instance. Its directors all had four-year contracts, and the bank had lent them £19 million to buy shares in Kaupthing, along with options to sell those shares back to the bank at a guaranteed profit. Virtually the entire bank’s stated profits were caused by its marking up assets it had bought at inflated prices. “The actual amount of profits that were coming from what I’d call banking was less than 10 percent,” said Shearer.

In a sane world the British regulators would have stopped the new Icelandic financiers from devouring the ancient British merchant bank. Instead, the regulators ignored a letter Shearer wrote to them. A year later, in January 2005, he received a phone call from the British takeover panel. “They wanted to know,” says Shearer, “why our share price had risen so rapidly over the past couple of days. So I laughed and said, ‘I think you’ll find the reason is that Mr. Einarsson, the chairman of Kaupthing, said two days ago, like an idiot, that he was going to make a bid for Singer and Friedlander.’” In August 2005, Singer and Friedlander became Kaupthing Singer and Friedlander, and Shearer quit, he said, out of fear of what might happen to his reputation if he stayed. In October 2008, Kaupthing Singer and Friedlander went bust.

In spite of all this, when Tony Shearer was pressed by the House of Commons to characterize the Icelanders as mere street hustlers, he refused. “They were all highly educated people,” he said in a tone of amazement.

And later this on the foreigners who jumped in:

You didn’t need to be Icelandic to join the cult of the Icelandic banker. German banks put $21 billion into Icelandic banks. The Netherlands gave them $305 million, and Sweden kicked in $400 million. U.K. investors, lured by the eye-popping 14 percent annual returns, forked over $30 billion—$28 billion from companies and individuals and the rest from pension funds, hospitals, universities, and other public institutions. Oxford University alone lost $50 million.

Interestingly enough, the latest issue of the New Yorker also has a piece on Iceland and its financial debacle. I wish the two authors and the two magazines had worked together--because they are so much similar, even in the writing styles! One interesting aspect in the New Yorker article, when it discusses the protests:

From the foot of the statue, Edward Huijbens, a geographer who teaches at the University of Akureyri, in northern Iceland, spoke briefly. In his thirties, he was a neatly Bolshevik figure, wearing a black fur hat, a white shirt, and a dark tie.

More power to geographers :-)

14.8 percent unemployment and underemployment

The government’s broadest measure of unemployment and underemployment was 14.8 percent in February. That includes some of the people who have stopped looking for work because they don’t believe they can find jobs. It also includes part-time workers who want to be working full time.

The Labor Department did not keep such a statistic in the early 1980s. But it likely would have been in the neighborhood of 17 percent then. (Awhile back, I created a similar — though slightly narrower, for reasons of historical consistency — measure, with help from Labor Department economists. It peaked in 1982 at 16.3 percent in December 1982; it was 14.1 percent last month.)

So it’s still too early to call this the worst recession since the Great Depression. But it’s bad, and it’s still getting worse at a rapid rate.

More on the jobs report, from Economix, is here and here.

Source: David Leonhardt

The wisdom(!) of CNBC

Life would be hell if it weren't for Jon Stewart, Stephen Colbert, The Onion, and other remarkably intelligently funny things. How do they do this day after day?

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