Saturday, July 12

Bringing dictators to justice is troublesome

This article is a very thought provoking one, talking about how ICC indictments are becoming more and more difficult. And if you look at the UNSC which has now been thought about as idiots for not voting against Mugabe, one wonders if this indeed will work.

Curious, no? how dictators are protected by Russia and China? Mind you, USA and UK are protecting their own goons, robbers and thugs in Pakistan, Iraq and in so many other countries. I guess, Mugabe is no longer our son of a bitch, no?


Futures speculation is the culprit behind high prices?

I wrote last week about futures and why we need them. You might want to read that first before reading this post if you havent done that already.

Anyway, here's an excellent article which nails the argument that its financial speculation using futures which is driving high prices. I will only paste 2 graphs which kill the argument. Enough said.

End of story.

Update: 20 July 2009: Another excellent post here on how trying to curb speculation does not work. Let me quote the end of their excellent post.

Over all, there is limited evidence that anything other than economic fundamentals is driving the recent run-up in commodity prices. The main driving factors in the energy markets include strong demand from China, India and other developing nations, a lack of growth in crude oil production and United States monetary policy. In the grain markets, driving factors are, in addition to monetary policy and demand from developing nations, the diversion of row crops to biofuel production and unfavorable weather that has hurt harvests.

The complex interplay of these factors and how they affect commodity prices is often difficult to grasp immediately, and speculators are a convenient scapegoat for the public’s frustration with rising prices. That’s unfortunate because curbing speculation — and hobbling the ability of businesses that rely on futures markets to reduce their risk — is counterproductive.

Regulation of commodity futures markets is at an important crossroads. Have we learned from our mistakes, or will we repeat them?

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Lose the high schooler and lose society

This article talks about how the overall American worker is getting less educationally qualified as time goes on and the baby boomer generation retires. I realise that this assumes that having higher qualification is good in today's knowledge globalising society, but that's besides the point. I quote the main point:

A startling and profoundly important fact about the US economy has received surprisingly little attention. The educational quality of the country’s workers is starting to decline – not just relatively (because other countries are catching up and moving ahead) but also, for the first time, in absolute terms. Over the coming years, baby-boomers departing from the labour force will have better educational qualifications than the younger workers replacing them. If the ultimate source of an economy’s ability to grow and prosper is its human capital, the US is in trouble.

But what caught my eye was this bit:

Yet one key indicator suggests real cause for concern: the declining high school graduation rate, which affects the supply of those seeking to go to college. This too has been a bitterly contested statistic in the US. The country’s highly decentralised education system causes a proliferation of conflicting data sources and definitions. But a recent careful study by Nobel laureate James Heckman and Paul LaFontaine found that the high school graduation rate “has been falling for 40 years” and that this “explains part of the recent slowdown in college attendance”.

This indeed was curious and rather alarming so I went digging. This article has more information on this issue. The problem seems to be, broadly speaking, a hollowing out or hourglassing of American society (something reflected in UK as well I believe) where more people are going to university but at the same time, more people are dropping out of school. And the statistics that these chaps quote are startling:

    1. the U.S. high school graduation rate peaked at around 80 percent in the late 1960s and then declined by 4-5 percentage points;
    2. the actual high school graduation rate is substantially lower than the 88 percent official estimate;
    3. about 65 percent of blacks and Hispanics leave school with a high school diploma and minority graduation rates are still substantially below the rates for non-Hispanic whites. Contrary to claims based on the official statistics, we find no evidence of convergence in minority-majority graduation rates over the past 35 years.
    4. Exclusion of incarcerated populations from the official statistics greatly biases the reported high school graduation rate for blacks.

And their reasoning for this? It is because the changing role of the family. If you are raised in a good, presumably two parent, well off family, then you will do good in school, graduate from a good university and go and be a good egg. But if you are, as is visible increasingly, from a poor household, a single parent household or from a household where educational attainments are not high, then you are stiffed. See here for a great list of statistics on various bits on the family, unfortunately a bit old, but still very useful.

Here was a startling list. Only 56.3% of fathers ever read to their age 5 and under kids when they were resident and only 17.1% did so when they were non resident. Presumably reading is crucial to the development of a child and also having a father is also good, but surely those statistics are not good. Why wouldn't you read to your child? Its amazing to see the play of emotions on their face when you growl like a lion or bark like a puppy or cry like a baby.

Here's the statistics for divorce and marital disruption which has a huge impact on children. 1 in 5 men will no longer be married after 5 years of marriage and almost 1 in 3 will no longer be married after 10 years. Considering that you might have kids from the first marriage, that means (assuming 1-2-1 relationships between marriage breakdown, kids in marriage), that 30% of the kids are in a broken home at least by the time they are 9-10 years of age. So are we surprised that their educational attainment sucks?

So here's some random questions. If the educational attainment of American workers is so driven by family structure and demographics, what can one do? make it more difficult to get divorced or make divorce impossible for the sake of the children? make adultery punishable by making it a crime? provide tax benefits for you to remain married? give you more money to be and remain married? But if you do not graduate despite clear economic incentives that you will get more money for being a graduate than not, then will economic incentives (invectives?) work?

What can civil society do? the kids need to do something. Vocational training for those who are not academically minded was all very nice and good, but increased automation and shipping of manufacturing jobs offshore means that they do not have that route out either. Dont know, bit confused.

Wednesday, July 9

Imperium - the story of Cicero the Republican

One of the areas which I am intermittently checking is ancient roman history. After bumbling around via Gibbons (perhaps the finest example of English writing any time...), Caesar (too many links to report), Augustus, it is now the turn of Cicero when I just finished the book called as Imperium. A fascinating story of perhaps the greatest orator in human history. The book itself looks at a relatively short slice of his life, from the time of the beginning of his legal career to the time he is just becoming consul. And this was written from the perspective of his slave, Tiro (apparently the father of stenography).

This book created what I would call as the human face of his speeches. I have read his speeches and his books, but they do not really give me the sense of touching the man. Very very few speeches do that, give you an indication of the grandeur of the man the timelessness of the message (the four score and... speech by Lincoln, Tryst with Destiny... by Nehru, We shall fight on the beaches...., Blood, toil, tears and sweat..... and this was their finest Churchill are unique exceptions, here's another list of good speeches). Not surprising, you need to be personally connected with the event and the then political, social, economic and international environment for the speech to speak to you. For example, I would not appreciate any speeches made by the Soviet or Muslim or Arab leaders as I would not fit into that world view.

But once you read about their lives, even though its fictional, these speeches come to life as you get some context, even though the story is fictional. The Cicerian speeches are masterpieces, I particularly liked the Catiline Orations. And you can understand why after reading the book. The man came out from the provinces, not a true Roman. And he got to the top because Rome was a republic, rather than the dictatorship or the empire it turned into.

And perhaps it was that was the reason that he became the enemy of such a host of luminaries ranging from Mark Antony and Julius Caesar. Father of the Republic, was one of the honorific's he was given but that's after the end of the book. The book talked about him being a politician and how he had to make some debatable decisions, like his support for Pompey.

But some insights were brilliant, at least to me. I recognised that in me as well. He wanted something he can believe in and then his speech came across as truly believable and faithful. Its so true, he would spend time on trying to find that one fulcrum on which he can tip his speech. Same with me, if I do not believe in the lecture topic, or the speech subject, my speech / lecture dribbles, literally dribbles. But the other thing is also true, he prepared like a madman. Staying awake at night, working like an idiot, preparation, preparation, preparation, all those helped in making him the great orator he was.

And he was flexible, if something would not work, he would switch dramatically. And that's something that is extremely difficult. Once you have a good established way of speaking and preparation, it is horribly difficult to switch. And for him to switch at something huge such as a criminal case was just amazing and courageous.

The book suffers from some bits that I would have liked to see much more, why not take it to the end of his life? the fun time started after he became a consul. And the language is a bit dry and unemotional. After all, the book has been written by a slave and where are the huge emotions? (Where's the old Taita language?) Bit of a bland re-telling of the story. And the topping and tailing could have been better, it got introduced very abruptly and ended very much so as well.

But hey, got the book as part of a 20 book for £1 sale at Oxfam, not bad, eh? So would say its 5/10.

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Tuesday, July 8

Beady's axioms

It is better to have a single point of failure (key man risk) than to have multiple points of incompetency.

again and again, one see's this problem of having incompetency, and that is indeed the slow kiss of death. Its better to have one good person and rely more on him rather than have several incompetent idiots who generally drag the entire bloody thing down and beat it to death with their sheer inertia, stupidity and lack of imagination.

Monday, July 7

A worrying review of Islamophobia in UK

This is indeed worrisome, and something that I have been worried about for many years now. This is not good and nothing good will come out of it for the UK, the non Muslims and the Muslims themselves.

When a society starts to undertake fratricide (killing of its own brothers), something good in the soul of the country disappears. Take a look at the USA, the wounds of the civil war decades and centuries ago are still not healed. Is this what we want to leave for our children? Germans are still known as the people who were responsible for genocide. The Brits are already dammed by their history in South Africa and in their role in colonialism and imperialism. Do they really want to add this to their list?

We seem to be going in reverse!

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Sunday, July 6

Corruption in Romania

This is what gets my goat. While the EU gets excited about the democratic finger in Ireland, they forget about structural issues such as corruption. I read about Romania in this week's Economist. And it was gobsmacking. But then, we already know that the EU itself is heaving with corruption. But this is the sad part, for it not to fix these maggots inside EU means that it will become even more irrelevant. And thus the seeds of the EU destruction will be sowed by the EU itself.


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More on Pape's Suicide Bombing disaster

For those who quote Pape's work on Suicide bombing, this article might be of use. Pape responded here. And yet, he did not respond to the crucial bit, that the data simply does not represent what Pape is claiming. QED. Thanks to the Monkey Cage.

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Make organs free for sale

I wrote two times before about organ donation in various aspects here and here. So yes, you would know that I am thoroughly for organ donation. And here is the issue in today's newspaper. Basically the question is, if you are dead, can the hospital use your internal bits for use in medical research or for saving somebody else's eyes or liver or what have you?

Most people do not care, they just go through life unknowingly and just like that. While organ donor wait lists (see here for a heart-wrenching list in the USA, 100,000 people waiting for an organ while only 6000 transplants were done).

I realise there are issues like people stealing body parts like this, or improperly storing body parts. But that does not remove the need for organs. Now, the main problem that I see is that the surviving heirs and relatives are unable or unwilling to let those organs go. Or you yourself are unwilling to let them go. And plus you do not trust the government to deal with resources. The answer is simple, allow people to sell their organs.

Either before or after, just like you should be allowed to prostitute your body just like you do your mind freely, your organs should be open for sale as well. In many cases, such as in India, Brazil and other poor countries, that is what happens. So you end up with a market that exists but is illegal.

Just like prostitution, you need to make this legal and allow people to buy and less under regulated circumstances, so that this huge imbalance between supply and demand can be removed. If you think that there is a problem with only rich people taking up organs, then well, have an organ bank by compulsorily harvesting organs from the dead and giving the heirs due compensation just like we do for cases around Eminent Domain or Compulsory Purchase.

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What's the need for futures?

In an email exchange on a left list, a question was asked, futures markets are filled with speculators and is bad for the health of financial markets, comment.

I was curious to understand why this was being said? The responder did not say much more than some vague commentary about how it screws up markets, prices, and stuff like that.

This is worrisome that despite futures being around for hundreds of thousands of years, we still have people getting confused about what they do and what benefit they bring to the table.

And this is from an Indian and that too a South Indian, who should know better. For example, pepper trading, futures, forwards, insurance, crop insurance, and the like have been known in South India for hundreds if not thousands of years. Futures trading made India prosperous. Why on earth do people say that India was the Golden Bird (Sone ki chriya)? It was because of advanced financial products, markets and infrastructure that the country generated so much wealth. To say this in another way, the answer was always under his nose.

(Incidentally, did you know that Ramses II had Indian peppercorns from India up his nose? So Indians have been getting up Egyptian's noses for thousand's of years and they follow them even after death.., heheheh). The Indian Ocean trading system can perhaps be said to be one of the earliest futures and trading exchanges, trading pepper, slaves, ivory, grain, camels and livestock, and so on and so forth.

Futures are crucial for the good functioning of any market because it removes the volatility of future prices by telling people what the value would be in the future expressed in today's terms. And all this in standardised terms which can be understood by all.

So I can purchase a set amount of orange juice or grain or oil or indices or what have you, at a specified price with delivery at a particular date in the future.

Of course, I do not need to take delivery of the stuff and can hedge it out, but do you see the basics of the contract? If I am a farmer, I can sell a future for my crop or if I am a bread maker, then I have security and confidence over my future supply. What futures exchanges further help is to provide more confidence in this entire process. And these markets are brilliant places where you can go to to find out what people are thinking about the future.

So no, please do not go after speculators on the futures markets. Fraud and collusion aside, these markets are vital for the proper functioning of our human society and have been functioning like this for thousands of years.

Prostitution is frankly fine

I read this story in detail. So now what they are trying to do is to stop men from paying for sex by criminalising the demand side rather than the supply side.

Prostitution is one of the oldest professions known to man, and it has been under control ever since. As before, the economist in me chuckles at the thought of these people still trying to control something as basic as the sex drive. And this is again ultimately going to fail.

Why? because you are trying to stop something that is natural and human driven. Men want to have sex, and they will get it, either via marriage, affairs, relationships or some form of relationship. We have defined a particular type of relationship as an illegal one. The range of hypocrisy involved is breathtaking but lets not go there.

You criminalise men going and picking up women, they will do it on the internet. Or it will still happen but will move into the darker shadows where the women are worse off. Go after the women and you criminalise them unnecessarily.

Any forcible participation should obviously be banned, but here's a question, if one is voluntarily allowing an orifice or organ to be used in return of monetary compensation, what's the problem? I do that, I voluntarily offer my organs to the bank in return of monetary compensation. What's the difference between a hair dresser using scissors and comb on another person versus a prostitute giving a blow job on another person? hypocritical morality, that is what it is. Economically speaking, they are both work, involving physical or mental expenditure. What about a phone sex line? Illegal? that's mental and linguistic prostitution, no?

tough one, but no, actually simple, it should be made legal until and unless it is done against somebody's will. And guess what? all these attempts to control it will fail, just like they have failed for the past thousands of years. OIY morons, repeating steps which have proven to fail but expecting them to work is the work of a what?

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Who not to marry?

This was funny, and I decided to take the test:

  • “Never marry a man who has no friends". Erm, I think the reverse is the problem, too many friends? lol
  • “Does he use money responsibly? Is he stingy? No and No
  • “Steer clear of someone whose life you can run, who never makes demands counter to yours. Erm, heheheh, again, the reverse is the problem, far too demanding
  • “Is he overly attached to his mother and her mythical apron strings? Erm, not that much, but do like her and she has defined what a woman should be! yet to find somebody to top her, to be blunt, and that too only on her public recognition, forget emotional attachments...
  • Does he have a sense of humor? That covers a multitude of sins. Too much teasing and firmly believe that there is nothing in the world that you cannot laugh about...
  • A therapist friend insists that ‘more marriages are killed by silence than by violence.’ Hmmm, now there might be something in this....
  • “Don’t marry a problem character thinking you will change him." lol lol lol, no change, none at all, remain a problem character. Dont drink that much, mind you, lol
  • Take a good, unsentimental look at his family". lol lol lol, nobody in my family would get married then..bunch of madmen.
  • Finally: Does he possess those character traits that add up to a good human being — the willingness to forgive, praise, be courteous? Or is he inclined to be a fibber, to fits of rage, to be a control freak, to be envious of you, to be secretive?". No idea, what do you think?
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