Friday, August 31, 2007

Seeing Humans in Saints

Some videos(“Penn & Teller: Bullshit!”) about saintly people's ungodly behaviors; Gandhi, Mother Theresa, and Dalai Lama.

We can’t independently verify it- and the videos may not be work safe in some parts of the world.

You Tube of the Day- Watch it Before Your Next Bet

Michael Orkin speech at Google;

World's biggest casino bets on Macau

Lecture of the Day-The Industrial Revolution and the Great Divergence

Greg Clark Lecture

Via Give "A Farewell to Alms" credit

The Future of Subprime Mortgages

Podcast of the Day- a book forum on Edward Gramlich's Subprime Mortgages: America's Latest Boom and Bust at Urban Institute.

Or watch it online

Security Tips

Desktop Security 101: A Quick Course In Safer Computing

Cyber Security Tips

Lets give Miss Teen South Carolina a 2nd Chance

Syntax under pressure
This Is Why I Avoid Doing Live TV Interviews Unless Dubner Makes Me


Assorted at Economic Investigations

The Political Economy of Numbers: On the Application of Benford's Law to International Macroeconomic Statistics

Many U.S. Children are Left Behind by Design

Recruiting smell for the hard sell

Your brain on gambling;
Games of chance prey on this neural system. Consider, for example, the slot machine. You put in a coin and pull the lever. The reels start to whirr. Eventually, the machine settles on its verdict. Chances are you lost money.

But think about the slot machine from the perspective of your dopamine neurons. Whenever you win some money, the reward activates those brain cells intent on anticipating future rewards. These neurons want to predict the patterns inside the machine, to decode the logic of luck.

Yet here's the catch: slot machines can't be solved. They use random number generators to determine their payout. There are no patterns to decipher. There is only a little microchip, churning out arbitrary digits.

At this point, our dopamine neurons should just turn themselves off: the slot machine is a waste of mental energy. But this isn't what happens. Instead of getting bored by the haphazard payouts, our dopamine neurons become obsessed. The random rewards of gambling are much more seductive than a more predictable reward cycle. When we pull the lever and win some money, we experience a potent rush of pleasurable dopamine precisely because the reward was so unexpected. The clanging coins and flashing lights are like a surprising squirt of juice. The end result is that we are transfixed by the slot machine, riveted by the fickle nature of its payouts.

How to Build Courage

Does Semen Have Antidepressant Properties?

Federal Reserve Policy Actions in August 2007: Answers to More Questions

While the ECB ponders, the Fed moves, and cleverly at that

Correlation between insula activation and self-reported quality of orgasm in women

Shallow lesson of business books
The mistake both authors and publishers of business books make is to confuse a book about “what I did” with a book about “how to do it”. Whether you are successful because you are skilful or successful because you are lucky, you can easily, and mistakenly, convince yourself that your own experience shows that anyone can do it.

Slouching Towards Utopia? The Economic World of the Twentieth Century: Chapter 7.1: The World in 1900: The View from 1900

Slouching Towards Utopia? The Economic World of the Twentieth Century: Chapter 7.2: The World in 1900: Poverty

Department of "Huh?"

Proposed Reading Course: Topics in Economic History

A Fed Chairman's lot is not a happy one (happy one)

Hacking the New "Employment at Nine Months" Formula

IP: An Odd Monopoly

The Standard Economic Model of IP

On Poverty, Maybe We're All Wrong;
The best refutation of this argument that I've seen in a long time is contained in a new book, "The Persistence of Poverty," by a friend of mine, Charles "Buddy" Karelis, a professor at George Washington University. Karelis isn't an economist or social welfare expert but a philosopher by profession with wide-ranging curiosity, a dry wit and a weakness for unconventional wisdom. And after doing lots of reading and giving it extensive thought, Karelis concluded that the reason some people are perpetually poor is that they don't have enough money.

We Are Not Unbaised

The Trouble With Ranking Life-Expectancy Numbers

Calculating the Cost of Weddings

Counting the Nation’s Obese

Making History Available

Who's Counting: Alternative Voting Methods and Mitt Romney's Mathematical/Political Gaffes

Capitalism and Democracy


How To Save Africa;
Industrializing Africa is the only way to solve its poverty. The industrialization of coastal China — accompanied by declining public health provision, a neglect of agriculture, and environmental degradation — ultimately transformed the lives of the Chinese.

Before the Industrial Revolution all societies were caught in the same Malthusian Trap that imprisons Africa today. Living standards stagnated because any improvement caused births to exceed deaths. The resulting population growth, pressing on fixed land resources, inevitably pushed incomes back down to subsistence.

Upper-Class Living Standards in 1900

An Introduction to Abstract Math ;
Here is a fun problem from the book: Consider an NxN square grid made up of 1x1 unit squares. Now take away from this grid two corner squares from diagonally opposite corners. The resulting board, which is now a square with two notches, has NxN-2 unit squares. You are then given dominoes with dimensions of 2x1. For what N can you completely cover the board with these dominoes?

What to read after Mathematics: A Very Short Introduction

One way to arrive at the definition of continuous functions

A beginner's guide to countable ordinals

Two definitions of `definition'

What is `solved' when one solves an equation?

They started me out on SPSS . .

Are Health, Wealth and Happiness Linked Worldwide?

A Dilettante's Guide to Art

Another stupid ranking of economics blogs

Thursday, August 30, 2007

Death Penalty in America

Recent research on the relationship between capital punishment and homicide has created a consensus among most economists who have studied the issue that capital punishment deters murder. Early studies from the 1970s and 1980s reached conflicting results. However, recent studies have exploited better data and more sophisticated statistical techniques.

-Paul Rubin, Statistical Evidence on Capital Punishment and the Deterrence of Homicide

“Creative” use of data by death penalty proponents
Nassim Taleb's "The Black Swan"
Statistics and the Death Penalty
Capital Punishment: Deterrent Effects & Capital Costs
Myths of Murder and Multiple Regression
The Economic Death Penalty: Show me the Model!
More on the Economics of Capital Punishment-BECKER
The Economics of Crime
The deterrent effect of the death penalty
The Economics of Capital Punishment--Posner
Why not all executions deter murder
Governor Commutes Sentence in Texas
Another Take on the Death Penalty
Capital punishment in America

Why don't Pakistanis listen to their Founder?

Muhammad Ali Jinnah’s speech to the nation on August 15, 1947;

The creation of the new State has placed a tremendous responsibility on the citizens of Pakistan. It gives them an opportunity to demonstrate to the world how can a nation, containing many elements, live in peace and amity and work for the betterment of all its citizens, irrespective of caste or creed.

Our object should be peace within and peace without. We want to live peacefully and maintain cordial and friendly relations with our immediate neighbors and with the world at large. We have no aggressive designs against any one. We stand by the United Nations Charter and will gladly make our full contribution to the peace and prosperity of the world.

The Story of Jinnah- Part 1 & Part 2

Pakistan Diary
Who Killed Zia?
Military Inc.: Inside Pakistan’s Military Economy
Musharraf Said to Agree to End His Army Role
Aid to Pakistan in Tribal Areas Raises Concerns
Winds of Change
Questioning Jinnah

Why the United States is fairer to Muslims than “Eurabia” is

Read the following two articles from The Economist;

Islam, the American way
The politics of mosque-building
The terms of the mosque debate vary widely: in the United States, mosque projects often meet practical objections, to do with “zoning”, water supplies or parking, but they are usually overcome, helped by a legal system that protects all faiths. In southern European countries like Spain and Italy—where attachment to Catholic symbolism is strong—people are much blunter about expressing their objections in cultural terms: this is a Christian land, and mosques have no place here.

In Rome, on August 21st, police halted work at a site on the Esquiline hill, in an area with a high immigrant population. The sponsors of a planned mosque there were found to have begun work without seeking permission from the local authority. The new building was to have gone up just a few metres from a Catholic church; for some, that was the most important point. A spokesman for a new far-right movement, La Destra, called it “an insult to Christian culture”.

Reza Aslan, a Californian writer on Islam, says that to his American eyes the intensity of openly “Islamophobic” opposition to mosques in parts of Europe, especially the south, is a shock. “It's as though some Europeans are confused about their identity and are now trying to construct one in opposition to Islam.”

Europe has a lot to learn from America.

Thinking by Visualisation- Rewriting Tufte

Madonna, Like A Prayer

Some links on Data Visualisation (via Stats Modelling)

Data Visualization; Modern Approaches

Web Trend Map 2007
The Shape of Song
16 Awesome Data Visualization Tools
Diagrams:Tools and Tutorials

Top 100 Economics Blogs?

Top 100 Economics Blogs

Wednesday, August 29, 2007

Economic Ideas in Fiction

From AEA;

Michael L Walden and M E Whitman Walden, Macro Mayhem: A Dia Fenner Economic Thriller

Michael L Walden and M E Whitman Walden, Micro Mischief: A Dia Fenner Economic Thriller

Tinker Marks, Theoretically Dead,

Michael Watts, The Literary Book of Economics

Jonathan B. Wight, Saving Adam Smith: A Tale of Wealth, Transformation, and Value, a novel

Miss Teen USA South Carolina & Rational Thought

Via Pub Philosophy

Some Philosophy Podcasts;
What is the worst argument in the world?Plato and his Republic
Mind games: coma calamities and delusional deliberations
The strange birth of Idealism
The Irish philosopher George Berkeley, born in 1685, was responsible for what it many respects a very strange theory: he thought that matter didn't exist
Paraconsistency: the wilder shores of logic

Random Blogs

Best of the Best

Willful Blindness

Africa Beat


Pub Philosopher

You Tube of the Day- Everything you wanted to know about The Economist

Interview with Mr John Micklethwait of The Economist

David Leonhardt on the Media

Samoa lifts ban on gay sex

News from Samoa;

According to The Fiji Times, the Samoa National Olympic Committee recently lifted a ban on gay sex for athletes competing in the upcoming South Pacific Games in August. The memo was published last week and encouraged members not to "embarrass yourself, your family and your country by trying this in the village—[because] it's against the law of God." Committee President Tapasu Leung Wei tried to explain away the statement by saying that the rules represented an "internal memo" not meant to be published, and maintained that Samoa "treats everybody as equal" (New Zealand Herald). But homosexuality is illegal under Samoan law, with penalties for indecency of up to five years in jail. Gay activist Roger To'otooali said that "if [the SNOC] wants to ban sex than they should ban all sexual activity, regardless of sexual orientation."

Bill Gates and Warren Buffet having fun

They seem to make a good pair- rich people should have fun together so that it may benefit the poor more often.

Related and Unrelated;
In Poker Match Against a Machine, Humans Are Better Bluffers

Outsourcing Philanthropy

A Question for David Warsh

I read the following comment posted by Joshua Gans on his blog;

David Warsh is a former journalist for the Boston Globe. For reasons that are beyond me, he has taken an extraordinary interest in the workings of academic economics. Presently, he publishes an excellent on-line newsletter, Economic Principals which is a must-read for economics academics.

David Warsh is one my favourite economic journalists- other great economic commentators include David Leonhardt at NYT, Martin Wolfe and Sebastian Mallaby.

My question to David Warsh; if I want to be a better economic journalist than yourself, what should I study or do?

Quote of the Day

I also harbor a Hippocratic Oath; an economist, other things equal, should do no harm; in formulating the odds and stating the main reasons behind them, he should come clean on the uncertainties.
-Paul Samuelson

cited in Paul Samuelson –On Being an Economist, p.114

Advice for Gabriel

Gabriel has a post requesting for advice on US graduate programs- sometime back Peter Boettke of GMU posted some advice;

At GMU we have a large PhD program --- approximately 200 students enrolled in the PhD program at various stages of completion. Each year we get about 200 applications, and we admit roughly 50. Funding is very limited. In the comments at that Freakonomics blog it is stated that to get into a top PhD program it requires a GPA of 3.7 or higher, a 800 on the GRE quantitative (or near that), extensive undergraduate math background, already existing research experience, and 3 letters of recommendation from well-known economists strongly supporting your case...

At first a student reading that might say that is insane, but it actually makes sense given what I know of our own program at GMU. To be admitted to our program this year you needed the following:

GPA -- 3.55; GRE Quantitative -- 770; GRE Verbal -- 610. To receive funding you needed a much stronger record. The only offsetting factor to these competitive scores is letters of recommendation from professors that are known to the staff and willing to push their student in our unique areas of strength at GMU (Austrian economics, experimental economics, law and economics, public choice, and religion and economics). Still a student cannot be significantly under those baseline scores and get admitted to the program, and the opportunities for funding from the department are non-existent if you are under those scores (though there maybe some private funding).

Could Steve Levitt get into a top Ph.d. program today?
Fun with Econ: Would Steven Levitt get into MIT today?
Ranking Econ Departments

Notes for students interested in pursuing a PhD in Economics

So you're thinking about life after college and possibly interested in applying to graduate school in economics...

Mathematics Training for Students Interested in Economics

Preparing for Graduate Study in Economics

Advice for Applying to Grad School in Economics

What's needed for graduate study?

Go to the website below only if you want cheat on an MBA paper

MBA Writer

See the also Game Theory Through Cartoons, Game Theory and Business Strategy Course

Photo of the Day

By Amanda Thomas of Guardian

Art of Writing a Will if you're Rich

"To my son, I leave the pleasure of earning a living, which he had not done in 35 years."

"To my daughter, I leave $1,000. She will need it. The only good piece of business her husband ever did was to marry her."

"To my valet I leave the clothes he has been stealing from me regularly for the past 10 years. Also my fur coat that he wore last winter when I was in Palm Beach."

"To my chauffeur, I leave my cars. He almost ruined them and I want him to have the satisfaction of finishing the job."

"To my wife: She has been troubled with one old fool, she should not think of marrying a second." ...

Just today, Queen of Mean Leona Helmsley cut off two of her grandchildren and left a $12 million trust fund to her dog, Trouble, whose body 'when he goes to the kennel in the sky' will lie beside her in a mausoleum.

The late wife of billionaire hotelier Harry Helmsley also left millions for her brother, Alvin Rosenthal, when she checked out. Rosenthal was responsible for caring for Helmsley's beloved white Maltese. The other two grandchildren were spared her final wrath and left $5 million each  providing they visit their father's grave at least once a year.

The dirt-hating Helmsley ordered that the mausoleum be "washed or steam-cleaned at least once a year," for which she left $3 million.

Helmsley also remembered the "little people" in her life and threw her chauffeur a bone - $100,000.
-Wills of the Rich and Vengeful

Tuesday, August 28, 2007

Mutant Ninja Cereals

Useful Mutants, Bred With Radiation;
Dr. Lagoda said a rust fungus threatened the Japanese pear, a cross between pears and apples. But one irradiated tree had a branch that showed resistance. He said the Japanese cloned it, successfully started a new crop and with the financial rewards “paid for 30 years of research.”

The payoff was even bigger in Europe, where scientists fired gamma rays at barley to produce Golden Promise, a mutant variety with high yields and improved malting. After its debut in 1967, brewers in Ireland and Britain made it into premium beer and whiskey. It still finds wide use.

“The secret,” reads a recent advertisement for a single malt Scotch whiskey costing $49.99 a bottle, is “the continued use of finest Golden Promise barley and the insistence on oak sherry casks from Spain.”

Africa and China in Pictures

Source; The Web Atlas of Regional Integration in West Africa, OECD

Monday, August 27, 2007

Econ Podcasts

On global imbalances and aid;
Paul Krugman, Jeffrey Frankel, Philip Lane and Easterly

On Economic Growth
Paul Romer, Robert Barro, Lucas on Growth

The moral consquences of economic growth

Petroleum: Prospects and Politics

How swarming theory could inform plasma physics and financial markets

Galbraith Wants Fed to Reexamine Monetary Policy

Kogan, Center on Budget and Policy Priorities, on CBO's Outlook

Taylor of Stanford Sees `Good Chance' Fed Will Lower Rates

Soss of Credit Suisse Discusses Fed's Discount Window Loans

Achuthan of ECRI Doesn't Sees Recession from Subprime Fallout

Ricardo Hausmann guest blogging with Rodrik

Hausmann talks about 'A Farewell to Alms

Can somebody email me a copy of the syllabus for Hausmann's following course at Harvard-PED-309: Development Policy Strategy

Ricardo Hausmann Defends Dark Matter

Videos featuring Hausmann at WorldBank;
Growth Diagnostics: A Conversation with the Chief Economist

Bank Practitioners’ Forum

The Growth Experience: Lessons from the 1990s

Growth Diagnostics: What Are They and Why Do We Need Them?

Improving Income Distribution and Poverty Reduction while Maintaining Fiscal Discipline, Macro Stability, and Micro Efficiency

Doomed to Choose: Industrial Policy as Predicament (Harvard)

Advice on Note Taking

Some simple things that professors tend to be not bothered with-an exception below ;

At the beginning of each class, I will usually distribute copies of the notes that I will project on the screen during that class. But these notes are only an outline. In order to study for the course effectively, you should plan to add your own comments in the margins of the notes I distribute or elsewhere. If your notes aren't very good, borrow notes from your classmates and copy them. (This is NOT cheating.) Unfortunately, studying from other people's notes is never as good as studying from your own. Finally, never try to memorize your notes; instead, use them to help you understand the material.

Q&A with Playboy

Check out the following Q&A with Chris Napolitano, Playboy editorial director at Freakonomics blog;

Q: To what degree is Playboy’s circulation decline a magazine issue versus a pornography issue (i.e., the digital revolution has hurt most magazines’ circulation and advertising prospects while also greatly increasing the supply of pornography)?

A: It’s a magazine publishing issue. We’re not going to kill ourselves by supporting what is widely acknowledged as a broken newsstand system, so we manage our rate-base accordingly. Please keep in mind that, because of advertiser sensitivity, Playboy relies enormously on generated revenue from subscriptions and single-copy sales. That makes us unique among most magazines, and it’s something we’re thankful about when the magazine industry ad pendulum swings in the wrong direction. It gives us something to hang on during such challenging times for magazines as now (particularly in the men’s category: FHM folded; Maxim has new ownership, and Stuff has been folded into it).

So what to do? We know our brand is stronger than ever; we’re reaching more consumers than ever through our various media platforms. We’re aware of the changes in how and where media is consumed today, and we’re well-poised to take advantage of that. Last year we combined the publishing and online groups, and we’ve increased the overall audience for Playboy. Our goal is to continue effectively aggregating that audience for our advertising partners. Our free site has a large portion of material from the magazine, and we’re discussing ways of extending even more content online. The challenge for the magazine industry is in figuring out ways to adopt metrics that go beyond what’s shown on the ABC and MRI statements.

I’m so sick of being held up to our circulation spike in the 1970s. The world was much different then. All magazines had higher circulations. Cable TV and the Internet did not exist; VCRs were in their infancy. Look at CBS then, and look at CBS now. But even in this niche market, CBS and Playboy are pretty damn big. And here’s the thing: thanks to our early arrival on the Web (Playboy was the first magazine with a Web site, launched in 1994), our combined audience is bigger than ever. We’re offering Playboy-style content on advertiser-supported and paid subscription sites, and the combined advertising revenue year over year is up.

Today, magazines exist in a universe of expanded entertainment choices for men. Even in the magazine universe alone, the competition is intense — there are a lot of magazines out there! And now we’re competing with free and pirated material online. It’s a transitional period, and we’re certainly one company with the resources and product to ride it out.

Deirdre McCloskey has a blog

"I want to tell you the story of a crossing from 52-year-old man to 55-year-old woman, Donald to Deirdre.

"A strange story," you say.

Yes, it's strange statistically. All the instruments agree that what's usually called "transsexuality," crossing the gender boundary, is rare. (The Latin in "transsexuality" makes it sound sexual, which is mistaken; or medical, which is misleading; or scientific, which is silly. I'll use plain English - "crossing.") Only three in 10,000 want to cross the boundary of gender, a few of them in your own city neighborhood or small town. Gender crossing is no threat to male-female sex ratios or the role of women or the stability of the dollar. Most people are content with their birth gender.

McCloskey's Weblog

Other things equal: Aunt Deirdre’s letter to a graduate student”

Journal of Feminist Economics

Nick Shulz interviews Deirdre McCloskey, "What's the Big Idea?"

The Economic Conversations

The Secret Sins of Economics
The Rhetoric of Mathematical Formalism

The Cult of Statistical Significance: How the Standard Error is Us Costing Jobs, Justice, and Lives

The Applied Theory of Price (full book available for download, 31MB)

The Hobbes Problem: From Machiavelli to Buchanan

Bourgeois Virtues?
The Art Of Forecasting From Ancient To Modern Times
Remembering the Man Behind Rational Expectations

Hoover & Siegler: McCloskey is Oh So Wrong About Statistical Significance
Sound and Fury: McCloskey and Significance Testing in Economics

Advertising Poverty

And some things that can be done about it- World Bank is trying to boost its image with staff profiles;

"I came to the Bank because I always wanted to work for the Bank"

I don't know whether people will buy that- the Bank needs to do a better job at improving its image than this.

Some of the official and unofficial World Bank blogs;
Private Sector Development Blog
Poverty & Growth Blog (seems to take long vacations)
IFC Blog
Charles Kenny

Sunday, August 26, 2007

A New Kind of Wisdom of Crowd

Some books you might want to pre-order;

Why Beautiful People Have More Daughters: From Dating, Shopping, and Praying to Going to War and Becoming a Billionaire-- Two Evolutionary Psychologists Explain Why We Do What We Do by Alan S. Miller and Satoshi Kanazawa

Super Crunchers: Why Thinking-by-Numbers Is the New Way to Be Smart
by Ian Ayres (via Freakonomics Blog)

The Stuff of Thought: Language as a Window into Human Nature by Steven Pinker

Advice to Young Muslim series

Advice No. 3; Learn from the life and practice of Al-Ghazali

A series on the Life of Al-Ghazali; Part 1, 2, 3, 4, 5, 7,8

Al-Ghazali's Books
Al-Ghazali The Niche of Lights

Al Ghazali, The Alchemy of Happiness

Al-Ghazali last words

The Faith and Practice of Al-Ghazali

In God we trusted, in Subprimes we busted

James Grant's op-ed on the recent events in Wall Street;

Late in the 1880s, long before the institution of the Federal Reserve, Eastern savers and Western borrowers teamed up to inflate the value of cropland in the Great Plains. Gimmicky mortgages — pay interest and only interest for the first two years! — and loose talk of a new era in rainfall beguiled the borrowers. High yields on Western mortgages enticed the lenders. But the climate of Kansas and Nebraska reverted to parched, and the drought-stricken debtors trudged back East or to the West Coast in wagons emblazoned, “In God we trusted, in Kansas we busted.” To the creditors went the farms.

Every crackup is the same, yet every one is different. Today’s troubles are unusual not because the losses have been felt so far from the corner of Broad and Wall, or because our lenders are unprecedentedly reckless. The panics of the second half of the 19th century were trans-Atlantic affairs, while the debt abuses of the 1920s anticipated the most dubious lending practices of 2006. Our crisis will go down in history for different reasons.

One is the sheer size of the debt in which people have belatedly lost faith. The issuance of one kind of mortgage-backed structure — collateralized debt obligations — alone runs to $1 trillion. The shocking fragility of recently issued debt is another singular feature of the 2007 downturn — alarming numbers of defaults despite high employment and reasonably strong economic growth. Hundreds of billions of dollars of mortgage-backed securities would, by now, have had to be recalled if Wall Street did business as Detroit does.

Benjamin Graham and David L. Dodd, in the 1940 edition of their seminal volume “Security Analysis,” held that the acid test of a bond or a mortgage issuer is its ability to discharge its financial obligations “under conditions of depression rather than prosperity.” Today’s mortgage market can’t seem to weather prosperity.

A third remarkable aspect of the summer’s troubles is the speed with which the world’s central banks have felt it necessary to intervene. Bear in mind that when the Federal Reserve cut its discount rate on Aug. 17 — a move intended to restore confidence and restart the machinery of lending and borrowing — the Dow Jones industrial average had fallen just 8.25 percent from its record high. The Fed has so far refused to reduce the federal funds rate, the main interest rate it fixes, but it has all but begged the banks to avail themselves of the dollars they need through the slightly unconventional means of borrowing at the discount window — that is, from the Fed itself.

What could account for the weakness of our credit markets? Why does the Fed feel the need to intervene at the drop of a market? The reasons have to do with an idea set firmly in place in the 1930s and expanded at every crisis up to the present. This is the notion that, while the risks inherent in the business of lending and borrowing should be finally borne by the public, the profits of that line of work should mainly accrue to the lenders and borrowers.

Does America need a recession?;
This does not mean that the Fed should follow the advice of Andrew Mellon, the treasury secretary, after the 1929 crash: “liquidate labour, liquidate stocks, liquidate the farmers, and liquidate real estate...It will purge the rottenness out of the system.” America's output fell by 30% as the Fed sat on its hands. As a scholar of the Great Depression, Ben Bernanke, the Fed's chairman, will not make that mistake. Central banks must stop recessions from turning into deep depressions. But it may be wrong to prevent them altogether.

Life in a Politically Driven Economy

Photos of the Day-Iraq

Source; More Iraqis Said to Flee Since Troop Increase ;
Statistics collected by one of the two humanitarian groups, the Iraqi Red Crescent Organization, indicate that the total number of internally displaced Iraqis has more than doubled, to 1.1 million from 499,000, since the buildup started in February....

Sixty-three percent of the Iraqis surveyed by the United Nations said they had fled their neighborhoods because of direct threats to their lives, and more than 25 percent because they had been forcibly removed from their homes...

“It’s fear,” he said. “Lack of services. You see, if you have a security problem, you don’t need a lot to frighten people.”

Some very lucky dogs?

The Pet Fashion Week;

See also Friday Photo: Has the pet industry finally gone too far?

India Fact of the Day

  • Its estimated that foreign businesses lose $500m (£250m) every year in India because of piracy
  • Experts say half of the music sold on the streets is illegal, while 60% of movies sold in India are allegedly fakes
  • Software companies, though, are bearing the brunt of the piracy trade. Figures indicate that 74% of software sold in India is counterfeit.
  • "Now China still has a higher rate of piracy than India - but they've seen a 6-7% drop in piracy levels, in comparison to 2- 3% in India."

-India steps up fight against piracy

Saturday, August 25, 2007

Use Demand and Supply to Explain the Following

Source; If There’s a High-Definition TV in Your Future, Wait Till After the Holidays

Forget about the Leaded Toys,..

A very interesting report on costs of growth in China;

But China is more like a teenage smoker with emphysema. The costs of pollution have mounted well before it is ready to curtail economic development.
  • Only 1 percent of the country’s 560 million city dwellers breathe air considered safe by the European Union
  • Nearly 500 million people lack access to safe drinking water
  • Experts once thought China might overtake the United States as the world’s leading producer of greenhouse gases by 2010, possibly later. Now, the International Energy Agency has said China could become the emissions leader by the end of this year, and the Netherlands Environment Assessment Agency said China had already passed that level.
  • One major pollutant contributing to China’s bad air is particulate matter, which includes concentrations of fine dust, soot and aerosol particles less than 10 microns in diameter (known as PM 10). The level of such particulates is measured in micrograms per cubic meter of air. The European Union stipulates that any reading above 40 micrograms is unsafe. The United States allows 50. In 2006, Beijing’s average PM 10 level was 141, according to the Chinese National Bureau of Statistics. Only Cairo, among world capitals, had worse air quality as measured by particulates, according to the World Bank.
  • In 2005, China became the leading source of sulfur dioxide pollution globally, the State Environmental Protection Administration, or SEPA, reported last year
  • China has only one-fifth as much water per capita as the United States
  • An internal, unpublicized report by the Chinese Academy of Environmental Planning in 2003 estimated that 300,000 people die each year from ambient air pollution, mostly of heart disease and lung cancer. An additional 110,000 deaths could be attributed to indoor air pollution caused by poorly ventilated coal and wood stoves or toxic fumes from shoddy construction materials, said a person involved in that study.
  • Another report, prepared in 2005 by Chinese environmental experts, estimated that annual premature deaths attributable to outdoor air pollution were likely to reach 380,000 in 2010 and 550,000 in 2020.
  • This spring, a World Bank study done with SEPA, the national environmental agency, concluded that outdoor air pollution was already causing 350,000 to 400,000 premature deaths a year. Indoor pollution contributed to the deaths of an additional 300,000 people, while 60,000 died from diarrhea, bladder and stomach cancer and other diseases that can be caused by water-borne pollution.
  • For example, the World Health Organization found that China suffered more deaths from water-related pollutants and fewer from bad air, but agreed with the World Bank that the total death toll had reached 750,000 a year. In comparison, 4,700 people died last year in China’s notoriously unsafe mines, and 89,000 people were killed in road accidents, the highest number of automobile-related deaths in the world. The Ministry of Health estimates that cigarette smoking takes a million Chinese lives each year.
  • Last year, China burned the energy equivalent of 2.7 billion tons of coal, three-quarters of what the experts had said would be the maximum required in 2020. To put it another way, China now seems likely to need as much energy in 2010 as it thought it would need in 2020 under the most pessimistic assumptions.
  • In 1996, China and the United States each accounted for 13 percent of global steel production. By 2005, the United States share had dropped to 8 percent, while China’s share had risen to 35 percent, according to a study by Daniel H. Rosen and Trevor Houser of China Strategic Advisory, a group that analyzes the Chinese economy.
  • China now makes half of the world’s cement and flat glass, and about a third of its aluminum. In 2006, China overtook Japan as the second-largest producer of cars and trucks after the United States.
  • Chinese steel makers, on average, use one-fifth more energy per ton than the international average. Cement manufacturers need 45 percent more power, and ethylene producers need 70 percent more than producers elsewhere, the World Bank says.
  • China’s aluminum industry alone consumes as much energy as the country’s commercial sector — all the hotels, restaurants, banks and shopping malls combined, Mr. Rosen and Mr. Houser reported.
  • Each year for the past few years, China has built about 7.5 billion square feet of commercial and residential space, more than the combined floor space of all the malls and strip malls in the United States, according to data collected by the United States Energy Information Administration
  • A vast majority of new buildings — 95 percent, the bank says — do not meet China’s own codes for energy efficiency
  • In 2005 alone, China added 66 gigawatts of electricity to its power grid, about as much power as Britain generates in a year. Last year, it added an additional 102 gigawatts, as much as France.
  • The Green G.D.P. team sought to calculate the yearly damage to the environment and human health in each province. Their first report, released last year, estimated that pollution in 2004 cost just over 3 percent of the gross domestic product, meaning that the pollution-adjusted growth rate that year would drop to about 7 percent from 10 percent. Officials said at the time that their formula used low estimates of environmental damage to health and did not assess the impact on China’s ecology. They would produce a more decisive formula, they said, the next year...That did not happen. Mr. Hu’s plan died amid intense squabbling, people involved in the effort said. The Green G.D.P. group’s second report, originally scheduled for release in March, never materialized.
  • The environmental agency still has only about 200 full-time employees, compared with 18,000 at the Environmental Protection Agency in the United States.
  • China has no Energy Ministry. The Energy Bureau of the National Development and Reform Commission, the country’s central planning agency, has 100 full-time staff members. The Energy Department of the United States has 110,000 employees

    Listen to a summary podcast.

Economists who love to fish

More Photos of Economists;

For more read 'Inside the Economist's Mind'

Help Wanted; If anybody comes across Economists Playing Music, let me know.

Lessons on Counter insurgency- Political Sci Fi?

Lt. Col. John Nagl on the Daily Show;

Juan Cole talks about his new book, Napoleon's Egypt: Invading the Middle East

Interview with Robert Pape

Interview with Juan Cole

For Discussion: Think about how a game theorist likeRobert Aumann would analyse the situation? The more I think about the current insurgency in Iraq, it seems that it would be impossible for the US to withdraw from Iraq without victory- if it did so, the costs (economic, political, moral, security) will probably outweigh the benefits of withdrawal.

Harvard Forum on Long War

Kahl: The US Military and Counter-Insurgency in Iraq

Guest Op-Ed: Polk on Insurgency & American History;
Is there some new magic formula for success? Generals David Petraeus and James Amos argue that there is. They have laid out a counterinsurgency doctrine. (December 2006 Counterinsurgency Field Manual). But it is not new. When tried in Vietnam, it did not work. As Petraeus and Amos admit, the key element in insurgency is political: “each side aims to get the people to accept its governance or authority as legitimate.” Is this a feasible objective for foreigners? One searches the historical record in vain for an example of success. The foreign occupying force, by definition, is alien. Vietnam showed that even when the aliens (us) had a numerous and established local ally (the South Vietnamese government) that ally was more apt to be alienated by its association with the foreign military force than that force was to be “Vietnamized” by their native ally. In sum, the single absolutely necessary ingredient in counterinsurgency is extremely unlikely ever to be available to foreigners.

Free Market Shock and Awe

John Nagle at Charlie Rose Show (highly recommended, was better than The Daily Show interview)

The U.S. Army/Marine Corps Counterinsurgency Field Manual;
Perhaps no doctrinal manual in the history of the Army has been so eagerly anticipated and so well received as Field Manual 3-24, Counterinsurgency. It is designed both to help the Army and Marine Corps prepare for the next counterinsurgency campaign and to make substantive contributions to the national efforts in Iraq and Afghanistan. The most important contribution of the manual is likely to be its role as a catalyst in the process of making the Army and Marine Corps more effective learning organizations that are better able to adapt to the rapidly changing nature of modern counterinsurgency campaigns. The most notable section of the manual is probably the Zen-like “Paradoxes of Counterinsurgency” in the first Chapter on page 47. These capture the often counterintuitive nature of counterinsurgency. The nine maxims turn conventional military thinking on its head, highlighting the extent of the change required for a conventional military force to adapt itself to the demands of counterinsurgency.

The field manual emphasizes the primary role of traditionally non-military activities and the decisive role of other agencies and organizations in achieving success in counterinsurgency in Chapter 2, “Unity of Effort.” In Chapter 3, “Intelligence,” the field manual shows it understands that, while firepower is the determinant of success in conventional warfare, the key to victory in counterinsurgency is intelligence on the location and identity of the insurgent enemy derived from a supportive population; one of the Principles of Counterinsurgency is that “Intelligence Drives Operations.” The Appendix on “Social Network Analysis” helps drive the Army’s intelligence system away from a focus on analysis of conventional enemy units toward a personality-based understanding of the networks of super-empowered individuals that comprise the most dangerous enemies the United States confronts today.

Small Wars Journal Blog

Vietnam's real lessons
In unconventional wars, body counts don't really count. In the Vietnam War, superior American firepower enabled U.S. forces to prevail in most tactical engagements. We killed plenty of North Vietnamese and Viet Cong. But killing didn't produce victory -- the exertions of U.S. troops all too frequently proved to be counterproductive.

So too in Iraq -- although Bush insists on pretending otherwise. His speech had him sounding like President Lyndon Johnson, bragging that, in each month since January, U.S. troops in Iraq have "killed or captured an average of more than 1,500 Al Qaeda terrorists and other extremists." If Bush thinks that by racking up big body counts the so-called surge will reverse the course of the war, he is deceiving himself. The real question is not how many bad guys we are killing, but how many our continued presence in Iraq is creating.

Progress in Iraq?

Global Guerrillas Blog

The Open-Source War
What's left? It's possible, as Microsoft has found, that there is no good monopolistic solution to a mature open-source effort. In that case, the United States might be better off adopting I.B.M.'s embrace of open source. This solution would require renouncing the state's monopoly on violence by using Shiite and Kurdish militias as a counterinsurgency. This is similar to the strategy used to halt the insurgencies in El Salvador in the 1980's and Colombia in the 1990's. In those cases, these militias used local knowledge, unconstrained tactics and high levels of motivation to defeat insurgents (this is in contrast to the ineffectiveness of Iraq's paycheck military). This option will probably work in Iraq too.

Our War on Terror;
The most counterintuitive, as well as the most politically difficult, premise of the manual is that the American military must assume greater risk in order to gather much-needed intelligence and, in the end, achieve greater safety. The emphasis of the 1990s on force protection is overturned by the assertion of several breathtaking paradoxes: “Sometimes, the more you protect your force, the less secure you may be.” “Sometimes, the more force is used, the less effective it is.” “Sometimes doing nothing is the best reaction.” Sarah Sewall, a former Pentagon official who teaches at the Kennedy School of Government at Harvard University (and a close colleague of mine), has contributed an introduction that should be required reading for anybody who wants to understand the huge demands effective counterinsurgency will place on the military and the voting public. “Those who fail to see the manual as radical probably don’t understand it,” she writes, “or at least what it’s up against.”

Sewall can say what the generals who devised the manual cannot. She addresses the concern that the manual is nothing more than a “marketing campaign for an inherently inhumane concept of war,” arguing that if politicians continue to put young American men and women in harm’s way, military leaders have an obligation to enhance effectiveness, which in a globalized era cannot be disentangled from taking better care of civilians. Military actions that cause civilian deaths, she argues, are not simply morally questionable; they are self-defeating.

But Sewall explains that even if the military can overcome the substantial challenges of executing such a counterintuitive doctrine — and here the near-daily reports of large-scale civilian loss of life as a result of United States counterinsurgency operations in Afghanistan and Iraq are a reminder of the yawning gap between theory and practice — it will not succeed if it does not get the civilian leadership and support it needs. The military does not have the expertise to perform the range of economic and political tasks associated with nation-building, but in Iraq and Afghanistan, as civilian reconstruction teams went unstaffed, it was forced to pinch-hit. Sewall rightly calls for the “risks and costs of counterinsurgency” to be spread across the American government, but notes this is not an overnight job. “More people play in Army bands than serve in the U.S. foreign service,” she writes.

The manual shows that the demands of counterinsurgency are greater than those the American public has yet been asked to bear. Sewall is skeptical that the public — now feeling burned by Iraq — will muster the will, even in Afghanistan, to “supply greater concentrations of forces, accept higher casualties, fund serious nation-building and stay many long years to conduct counterinsurgency by the book.”

While the United States military’s new counterinsurgency doctrine is based on achieving legitimacy with the local population, Ian Shapiro, a professor of political science at Yale, believes American foreign policy as a whole must vastly increase its legitimacy if it is to defang terrorists in the long term. For this to happen, he writes in his book CONTAINMENT: Rebuilding a Strategy Against Global Terror (Princeton University, $24.95), the president’s critics in the Democratic Party must stop freezing like “donkeys in the headlights” in the face of Bush’s war on terror and instead put forth an alternative strategy. “You can’t beat something with nothing,” he insists. Shapiro argues for a return to the cold war rubric of “containment” — a halfway house between “appeasement and the chimerical aspiration to achieve U.S. control over the global security environment.”

Hezbollah: A Short History by Augustus Richard Norton

Professor Nagl's War;
The more Nagl read, the more he understood the historical challenge of insurgency. Julius Caesar complained that his legions had trouble subduing the roving Britons because his men ''were little suited to this kind of enemy.'' In the early 1800's, Carl von Clausewitz wrote of ''people's wars'' in which ''the element of resistance will exist everywhere and nowhere.'' The book that most forcefully captured Nagl's imagination was written by T.E. Lawrence, popularly known as Lawrence of Arabia, the British officer who, during World War I, led Arab fighters against the Turkish rulers in the Middle East and described the campaign (taking liberties with the facts) in his counterinsurgency classic, ''Seven Pillars of Wisdom.''

Lawrence's is one of the few books in the canon written from the point of view of the insurgent. (Another is Mao Zedong's ''On Guerrilla Warfare.'') In a near-hallucinatory state, suffering from dysentery and lying in a tent, Lawrence realized the key to defeating the Turkish Army. ''Armies were like plants, immobile, firm-rooted, nourished through long stems to the head,'' he wrote. Lawrence's guerrillas, by contrast, ''might be a vapour.'' For the Turks, he concluded, ''war upon rebellion was messy and slow, like eating soup with a knife.''

In his own research, Nagl focused on two modern insurgencies in Asia. In Malaya in the 1950's, the British successfully suppressed a Communist revolt (comprised mostly of ethnic Chinese) by generally steering clear of excessive force and instituting a ''hearts and minds'' campaign to strip the insurgents of public sympathy. In Vietnam in the 1960's and 1970's, the United States military took a different approach and failed. The Americans resorted to indiscriminate firepower and showed little concern for its effect on the civilian population. Comparing the two efforts, Nagl demonstrated that a key issue for a counterinsurgent army is to calibrate correctly the amount of lethal force necessary to do the job with the minimum amount of nasty, counterproductive side effects. Even if using force with restraint meant the mission would take more time or reduce the level of force protection, it was still an indispensable step: a successful counterinsurgency took care and patience. When Nagl's doctoral thesis, ''Counterinsurgency Lessons From Malaya and Vietnam,'' was published in 2002, it carried the subtitle ''Learning to Eat Soup With a Knife.''

How much did the Marshall Plan really matter?

Think before you shoot;
The 282-page manual reads at times like a litany of the things America has done wrong in Iraq. But those arguing for withdrawal will find little solace. Insurgencies, it says, “are protracted by nature”. America and its allies must show the “ability, stamina, and will to win”.

Moreover, counter-insurgency cannot be done on the cheap. It requires large amounts of manpower—some 20 to 25 members of security forces for every 1,000 civilians. The 483,000 combined coalition and Iraqi forces (of dubious quality and loyalty) fall well short of the 535,000 to 670,000 required to secure Iraq.

American military tactics-How to do better;
In an example recently praised by George Bush, the 3rd Armoured Cavalry Regiment carried out a model attack on insurgents in the northern Iraqi town of Tal Afar in September, first emptying it of civilians, then giving Iraqi soldiers the lead in the offensive. This success was, in large part, a response to failure, according to the regiment's commander, Colonel H.R. McMaster. On a previous deployment to Iraq, in western Anbar province, the unit had done terrible damage with random and aggressive house-to-house searches, mass arrests and thuggish crowd control. Since arriving in Tal Afar last April it had patrolled often and on foot, looking for human intelligence, and had avoided making indiscriminate arrests.

But Colonel McMaster was relatively lucky. He had seasoned troops, and enough of them, to control his area. The marine division currently in Anbar, Iraq's most violent province, is too thinly spread and too shot-at to develop such nice behaviour. Unable to get control of the rebellious towns in the Euphrates river valley, often supported by air strikes but rarely by Iraqi troops, the marines are fighting a mid-intensity war.

Battle Command Knowledge System

Military Hones a New Strategy on Insurgency

Small Wars Manual

On the COIN Manual

Air Force Lashes Out at Grunts in New War Manual

The New Counterinsurgency; Airpower to the Rear; That Satellite Is Toast .... ;
The views in FM 3-24 reflect a limited knowledge of airpower’s true role in the current operation and suspicion that airpower can all too easily prove counterproductive. This is all the more distressing in light of the view that Petraeus will set direction for the ongoing fight in Iraq.

The new doctrine argues that airpower is best put under control of a tactical ground commander or, at the highest level, the multinational force commander, but not an airman.

It usually takes a while for a government to realize that an insurgency is under way, Petraeus and Amos wrote. The insurgents “take advantage of that time to build strength and gather support.” When the fight erupts, defenders “have to ‘come from behind'" and catch up to the situation.

In short, counterinsurgencies don’t go too well at first. Western militaries “falsely believe that armies trained to win large conventional wars are automatically prepared to win small, unconventional ones” and fight COIN with a similar mind-set.

Professors on the Battlefield ;
Over the past few years, Gen. Petraeus has been cultivating ties to the academic community, drawing on scholars for specialized knowledge and fresh thinking about the security challenges facing America. "What you are seeing is a willingness by military officers to learn from civilian academics," says Michael Desch, an expert on civilian-military relations at Texas A&M. "The war on terrorism has really accelerated this trend."

The terms of this relationship are most evident in the new Counterinsurgency Field Manual. In the face of a gruesomely persistent Iraqi insurgency, Gen. Petraeus was charged with revamping the outdated counterinsurgency doctrine. In an unprecedented collaboration, he reached out to Sarah Sewall, who directs the Carr Center for Human Rights Policy at Harvard University, to help him organize a vetting session of the draft manual at Fort Leavenworth in Kansas.

The conference brought together journalists, human-rights activists, academics and members of the armed forces to exchange ideas about how to make the doctrine more effective and more humane. Ms. Sewall, who since 2001 has been trying to get the military to bring the concerns of the human-rights community to the table, tells me that with Gen. Petraeus it is like pushing on an open door. And according to Montgomery McFate, who had a hand in drafting the manual, this was probably the first time that anthropological insight has been officially incorporated into more than 200 years of military doctrine. In chapter one, it explicitly states that "cultural knowledge is essential to waging a successful counterinsurgency. American ideas of what is 'normal' or 'rational' are not universal." (The manual was published last month by the University of Chicago Press. Ms. Sewall wrote the foreword.)

"Anthropologists have the opportunity right now to influence how the national security establishment does business," writes Ms. McFate in an email from Afghanistan, where she is a senior adviser to the Human Terrain System project. A Yale University-trained anthropologist, she has been the target of bitter criticism from the anthropology establishment on account of her tireless efforts to convince the military that cultural knowledge is key to winning over the people in war-torn societies like Iraq and Afghanistan. She insists that a growing number of anthropologists are questioning the conventional wisdom and reconsidering whether the most effective way to influence the military is "by waving a big sign outside the Pentagon saying 'you suck.' "

Harvard's Humanitarian Hawks


John Nagl talks about his book, Learning to Eat Soup with a Knife: Counterinsurgency Lessons from Malaya and Vietnam.

Dr. Robert Pape on 'Dying to Win'

A Conversation on Iraq with Senator Joseph R. Biden, Jr. (D-Del.)

Thursday, August 23, 2007

Mumbo Jumbo?

Via Respectful Insolence

For Discussion; Is Dawkins' approach the best way to win back people to science? His confrontational style may have the negative effect of what he intends.

Economics of Witch Hunting
The Great Indian Witch Hunt

Flu Struck

Light blogging next week.

Assorted Podcasts

Recent EconTalks;
Deborah M. Gordon, Professor of Biological Sciences at Stanford University on Ants, Humans, the Division of Labor and Emergent Order.

Weingast on Violence, Power and a Theory of Nearly Everything

What do Muslims Believe?
Ziauddin Sardar, writer, broadcaster and cultural critic, and Visiting Professor, the School of Arts, the City University

The Great Partition: the Making of India and Pakistan

Bill Bryson - A short history of nearly everything

Into the blue: voyages of discovery 1700-1850

Why creationism is wrong and evolution is right

Manic Times

How swarming theory could inform plasma physics and financial markets

Harold Bloom interview- Part 1, 2, 3


Michelle Grattan - Is Politics Still a Profession?

A Guide to the Perfect Latin American Idiot

Love Bollywood

Grammar Challenge: Must and mustn't

Allan Little profiles Republican Presidential Candidate Mitt Romney

Blog of the Day

Statistical Expert Blogs

Quality Rating (1 out 10, very poor)

Spam disguished as Praise

Another of example of Spam;

Hey buddy! Nice blog that you maintain here.. I just chanced upon your blog surfing the blogosphere. I was thinking.. you could try out some interesting widgets on your page and spice it up with some great pictures. E.g try out the poster widget on with your relevant keywords. It has some of the best images i have ever seen.

Readers, imagine you're spammer- try out the most creative spam you can write in the comments.

Wednesday, August 22, 2007

Courses you wish you had taken

International Micro Economics by Edward Leamer

Congratulations Masa

A new economics PhD is minted.

Photo of the Day

Via FP blog.

Imagine a World Without Us

Sounds like a fascinating book, The World Without Us.

Daily Show interview
Your House Without You

The Fall of New York
NYT Review;
When it comes to antiquity Mr. Weisman can draw on tangible evidence to back up his speculation. He marvels at the scope and durability of the large underground city of Derinkuyu in Cappadocia, Turkey, especially in comparison to showier monuments with less staying power. There is also hope for the endurance of Mount Rushmore and for Egypt’s Khufu pyramid, although the latter “should not look very pyramidal at all” a million years from now.

“The Panama Canal,” on the other hand, “is like a wound that humans inflicted on the Earth — one that nature is trying to heal,” according to a superintendent of its locks on the Atlantic side. And a disintegrating coral reef in the Pacific is on “the slippery slope to slime.”

From the gyre that is the Great Pacific Garbage Patch to the flower-growers of Kenya to the Rothamsted Research Archive in Britain, a repository for more than 300,000 soil samples, Mr. Weisman covers a huge amount of terrain...