If your country is heterogeneous, then you have less social capital

Makes sense, doesn't it? Here’s the abstract.

Motivated by theoretical arguments (see e.g. Putnam, 2007) that assert a negative impact of ethnolinguistic diversity on social capital, this paper aims to provide some empirical evidence on the relationship between the two variables. In particular, using a cross section sample of 68 developed and developing countries, this paper has found a significant negative effect of ethnolinguistic diversity on social capital. Countries with fractionalized ethnic and linguistic groups as captured by both log number of languages and Desmet et al. (2012) and La Porta et al. (1999)’s measures on linguistic diversity tend to have lower levels of social trust, fewer memberships in social organizations, deteriorated social norms and structure, hence, lower overall social capital stock.

if you look at successful countries with high social capital, then they were more homogenous…interesting evidence.

Living standards and plague in London, 1560–1665

First the abstract

This article uses individual records of 930,000 burials and 630,000 baptisms to reconstruct the spatial and temporal patterns of birth and death in London from 1560 to 1665, a period dominated by recurrent plague. The plagues of 1563, 1603, 1625, and 1665 appear of roughly equal magnitude, with deaths running at five to six times their usual rate, but the impact on wealthier central parishes falls markedly through time. Tracking the weekly spread of plague, we find no evidence that plague emerged first in the docks, and in many cases elevated mortality emerges first in the poor northern suburbs. Looking at the seasonal pattern of mortality, we find that the characteristic autumn spike associated with plague continued into the early 1700s. Natural increase improved as smaller crises disappeared after 1590, but fewer than half of those born survived childhood.

A story of London.

These are the mortality graphs in London plague years by parish relative to median mortality in the preceding five years. What is very clear is that the deaths happened in North London..actually near where we live. Fascinating behaviour. It was quite interesting to imagine how these outbreaks and epidemics would grow through time, can you imagine deaths at 5-6 times normal rampaging through the crowded, dirty tenements of London? fascinating.

Some reflections on the financial crisis

I was thrown into the wolves yesterday. In an academic conference full of economics, finance, politics, philosophy and journalist professors from across the world, this uglyass suited fat old git of a banker shambled in and decided to bollox up their lives. Apparently, for the past three years, they were debating how to fix the finance sector and then decided to invite me in to discuss the financial crisis, (i) what has gone wrong, (ii) what needs fixing, and (iii) how to put things right. Here are some thoughts.

• Andrew Lo compared the search for reasons and fixes to the Financial Crisis to Rashomon, I would much rather talk about the Blind Men of Hindoostan. We are observing this from London, so the reasons are bit broader than what has been summarised nicely by Andrew Lo and others.
• What's the problem and what's a symptom? Low interest rates? loose fiscal and monetary policy? housing bubble? subprime mortgage issues? liquidity and solvency issues? originate to distribute? fraud? reward and compensation policies in investment banking? repeal of Glass Stegal? Hubris? Too big to fail? regulatory failure? corporate governance? capital structure discussions - preference setting off debt against tax versus equity, regulatory capture and political contributions, inequalities? global capital imbalance and the dollar as reserve currency? govt push for housing - Freddie and Fannie mae, BSDs and Masters of Universe, risk transfer and risk management policies?
• What needs fixing? All of the above
• How to put things right? capital adequacy - Basel III, recapitalisation of banking system, the breakup of investment and retail banks - reintroduction of glass steagal, improved regulatory oversight, changes in comp policy, CoCo bonds, living wills, shrinking banks, etc. etc.

The above were my notes. So after the initial discussions, then questions came fast and furious. Im afraid I was very disruptive. Somebody asked me if the additional regulations were appropriate. I said, yes, the answer is yes. Is it going to avoid another crisis? No, its like saying passing laws against murder and theft will stop murder and theft. Plus all those regulations are actually increasing the possibility that there will be less money to go around.

A professor asked me, what should we teach our students? I said, I don't know about students as I am not a full fledged academic, but I look at my son and tell you the four things I taught him

1. How to survive on his own, cooking, killing, hunting, growing vegetables, DIY, etc.
2. Personal financial management, how to manage his own finances and how to be self sufficient, prudent with money, etc.
3. I have taught him that he needs to have a technical skill, something that he can rely on somebody paying for that all through his life. That can be coding, that can be accounting, that can be engineering, that can be copywriting, something that somebody can and will pay for what you do. If nothing else, learn to dig ditches.
4. Finally, learn how to sell. Everybody sells. Everybody. Some sell services, some sell ideas, some sell products, some sell themselves. Everybody needs to learn how to sell.

The last thing pisses me off, why don't business schools teach selling? eh? eh? There are about 150 business schools here in the UK. Do you know how many business schools teach sales? THREE. Warwick, Cranfield and Portsmouth. WTF? What do you think business is if its not revenue generating and selling? MORONS! I met with some people in Cranfield and I was pleasantly surprised to note their lovely sales programme. I am going to do something with them..

But the bottom line I told the conference. Remember that banking is an intermediary. And stop ascribing morality to economics. It takes money from people who have excess and gives it to who need it. If you want to reform it, then remove the need for banking.

When people were fulminating about derivatives, I asked a question, how many people here have insurance? Why are you taking insurance? Go home and stop taking insurance. If you cant, then dont fulminate against other people who are looking to protect their assets. But but, you cant slice and dice and and and. I said, you guys are confusing the underlying desire to protect with an instrument. Its like saying you need to ban ferraris because they drive too fast. That’s not going to change the underlying need to protect. People will find some other way to protect themselves.

Then I scared the crap out of them and said, you guys are all having academic pensions and think you are safe from the markets, eh? Let me wake you up, each and every one of you is going to have a poor retirement because there is no money in the pot. The deficits will be made up by the governments squishing your returns and asking you to pay more and work longer. That scared the crap out of them. heh.

My final point was, let the market be (I said I was a libertarian and that prompted some air whistling through the teeth and when I said that that was based on my religious principles – my Indian heritage tells me that I am responsible for my salvation through my deeds – that confused the heck out of these chaps, lol, they cant really complain about my religious beliefs while being against the tea party like / ayn ryandian individual rights business..hehehehehe). You complained about structured products, well, the crash made sure that pretty much a majority of people making and selling structured products have lost their jobs and the products arent there.

But bottom line is, we cannot live like this, spending too much, consuming too much. I said that we are heading for another crash as every sector of the economy, individual, household, corporate and government is trying to deleverage, so there is no demand. Don't assume that the business cycle is banished. So demand zero. ANy external shock like war or natural catastrophe is going to screw up our lives. Which I will welcome, I am hoping for a crash. Pretty much, I am happy to plonk down some money that in the next 5-7 years, we will have another crash/recession. And then hopefully people will wake up and reduce spending, reduce demands, reduce consumption, reduce materialism.

Here’s a great cartoon.

If young Americans knew what was good for them, they would all be in the Tea Party.

This great lecture, at end of the day, will come and go, and the moron Politicians and the even more idiotic public will simply ignore it. People do not realise that they are spending money which belongs to our children and our grand children. Did you know that the current conservative government has taken on more debt in 4 years than the entire Labour government in the last time over 13 years? What the hell is happening?

Some extracts

The heart of the matter is the way public debt allows the current generation of voters to live at the expense of those as yet too young to vote or as yet unborn. These mind-boggling numbers represent nothing less than a vast claim by the generation currently retired or about to retire on their children and grandchildren, who are obligated by current law to find the money in the future, by submitting either to substantial increases in taxation or to drastic cuts in other forms of public expenditure.

If young Americans knew what was good for them, they would all be in the Tea Party.

The present system is, to put it bluntly, fraudulent. There are no regularly published and accurate official balance sheets. Huge liabilities are simply hidden from view.

Not even the current income and expenditure statements can be relied upon in some countries. No legitimate business could possible carry on in this fashion.

Western democracies are going to carry on in their current feckless fashion until, one after another, they follow Greece and the other Mediterranean economies into the fiscal death spiral that begins with a loss of credibility, continues with a rise in borrowing costs, and ends as governments are forced to impose spending cuts and higher taxes at the worst possible moment.

In this scenario, the endgame involves some combination of default and inflation. We all end up as Argentina.

The 7 Fastest-Growing Cities in the World

I didnt get even a single one right. I am gobsmacked. Check out this site.

No free house or government money till you are over 18 and if over 18, only for 1 child

This sort of makes sense. I know there are exceptions, but why on earth are we paying for zillions of these unwanted kids which cannot be brought up suitably? I quote:

There is a far easier way to reduce the abortion rate, discourage feckless little slappers from getting up the duff in the first place. No free house or government money till you are over 18. If Shaznay, and more importantly, her parent(s) thought, for 1 second, that the full financial responsibility of bringing a baby into the world fell squarely on her/their shoulders there would be far less 'accidents'. If Shaznay is over 18 then she get's her free 1 bedroom flat and financial support for THAT child. If she has another 'accident' whilst on benefits, well, tough fucking shit. No housing upgrade, no extra financial support, nothing.

Guess what they are doing in India?

Close to 10 per cent of Indian households are opting to have only one child as they seek to concentrate their resources to maximise earning opportunities for their offspring in a scramble for jobs.

The research shows that competition for jobs in a fast-growth economy was the greatest determinant of the single child trend in India. Couples with a single child did not consume or work more, or enjoy greater leisure time. What marked them out from larger families was their greater investment in their children to help them attain white collar jobs.

Single children received more education expenditure, were more likely to be enrolled in private school, and by the time they reached 11 years of age were more likely to be able to do basic arithmetic.

“Education has grown, but jobs have not,” said Ms Desai. “There’s a great deal more competition.”

Extraordinary thinking amongst the politicians in the UK, when will they grow up and realise that we cannot really keep on having more kids than what we can support?

Demographic Time Bomb in Greece

From here.

ouch.

Are rest of the OECD countries listening? they need to attract the young and upcoming lot…As the blog says, the young and mobile are going to move off even more and that will mean that the future tax take is going to suffer until and unless immigration helps. Like hell it will. And if you think that the birth rate is going to help, then think again. Since 2003, the birth rate was 9.79 births per 1000 and it has fallen to 9.45 in 2009. That is a serious drop. In terms of comparison, its 205 on the list of nations. To make matters worse, the old chaps are dying faster, 9.86 in 2003 to now 10.51 in 2009 as the old chaps reach life expectancy and start dying. The country is going to empty out…

Gulf Arabs are lazy and will get drowned in the Asian Tsunami

A great post here. Read it fully. Mind you, something that the author has not considered is the fact that the fertility rates across the Arab lands is dropping dramatically, with certain countries such as Tunisia now approaching European levels. In other words, the fertility is below replacement rate and other things being equal, the Arabs will disappear in due course of time (to be replaced by??). So keep the women in ignorance and have a high birth rate. Educate them and watch the generations squish down.

I quote:

Al-Jamri suggests that foreign labour we customarily have and as their visas suggest, should not be classified as temporary due to their semi-permanence in our communities. He contends that what we really have is full-scale emigration. And this, denotes the possibility of them soon demanding their human and political rights. Whether we like it or not, international conventions give them those rights. After all, quite a lot of them have already surpassed the requirements to gain the citizenship in the country they chose to work in even by using local constitutions and laws. […] As Al-Jamri suggests, it is not too far fetched to have India exerting its major power in our countries by proxy. It will apply inordinate political and cultural influence by virtue of the millions of its citizens gaining citizenships, or even just continuing to live and work in our countries without any measure of control and without investing in the local population’s education and rehabilitation. Al-Jamri suggests that India’s political influence might well develop into making our countries a part of a “Commonwealth of India” soon, as its former citizens will gain positions of responsibility in both private and public sectors, even rising to ministerial positions within the Cabinet.

All this to be taken with a grain of piquant salt!!!

I wonder if the British Immigration chaps have picked up on this?

Now if one in five sperm donor's are from outside the UK, surely this is immigration by stealth? If you think about it, who knows what kind of genes or nationality are coming through!! Denmark is ok, but USA? that's like immigration central, the originator country of the phrase, melting pot.

I am sure the people who track, trap and debate this kind of issue here in the UK like Migration Watch should incorporate this as another dimensions.

All this to be taken with a grain of piquant salt!!!

One in five UK sperm donors is from overseas

By Marie Woolf, Political Editor

Published: 09 September 2007

Britain's sperm donor shortage is so acute that one in five donors is from overseas, The Independent on Sunday can reveal.

Documents show that the Government's decision to remove anonymity from sperm donors has led to a sharp drop in the number of men willing to donate.

This has led to the "bulk" import of sperm coming from overseas, primarily the US and Denmark.

Some counties, such as Lancashire and Northumberland, now have no sperm donors at all, while Cornwall and Shropshire each rely on one active donor to provide semen for women with fertility problems.

Many fertility clinics have had to close their insemination services altogether, forcing women to turn to the internet to find donors.

The Liberal Democrat MP and former doctor Evan Harris said that ending anonymity was a "disaster" and meant many women would be unable to have children.

Parents and old people need so little but they need the little so much!

This is a bit of a sad state of affairs, but perhaps inevitable given the changes in demography and economics. Still, it is a bit tragic to read about old people being dumped in old age homes, abandoned and no longer loved. To the extent that the government has to enact a law to force children to take care of their parents! Mind you, we have child abuse laws. But, ok, I am thinking too much. Read and reflect as Tarek says (I am sure he wouldnt mind me pinching his sign-off line!).

All this to be taken with a grain of piquant salt!!!

Indian bid to enforce children's obligation to aging parents

Amid changing family values, a proposed law would force children to support their elderly parents.

By Anuj Chopra | Correspondent of The Christian Science Monitor

PUNE, INDIA

Tarabai Godbole vividly remembers the proud moment when she gave birth 50 years ago. But now, in her twilight years, Ms. Godbole's pride is sobered by her feelings of rejection from her own child.

Two years ago, at the age of 75 and after the death of her husband, Godbole was left by her daughter in an old age home run by the city's Radha Medical Trust. For the first two months, her daughter visited her regularly and paid for her medical expenses.

But then the visits stopped, and the trust says Godbole's daughter can't be found.

"You become a burden on your kids when you grow old," Godbole says.

As a rapidly urbanizing India sees its social landscape shift away from traditional family bonds, the country's once-revered elders are becoming increasingly marginalized. The swelling ranks of middle-class children are moving out of their parents' homes to live independently or go overseas for better employment opportunities, leaving the elderly at home.

To offer legal recourse to people like Godbole, the Indian government introduced a bill this year that would make it a legal obligation for children, heirs, or relatives to provide financial assistance to senior citizens. Such a law would take India's traditionally strong sense of filial obligation into the stricter territory of legal statute.

"India is losing its family values," says Sumangala Gokhale, president of the International Longevity Center's office in Pune. "Children move out as soon as they become financially independent."

Along with its changing social dynamics, India is also witnessing a demographic shift. While its population remains predominantly young, the office of the Registrar General of India forecasts that people over the age of 60 will make up more than 12 percent of the population by 2026 – up from nearly 7 percent in 2001.

Loneliness a problem for India's seniors

Surveys among India's elderly have found that due to abandonment or gross neglect by children, India's elderly suffer from loneliness and isolation.

According to HelpAge India, a New Delhi-based organization that advocates on behalf of India's elderly, 11 percent of India's elderly live alone or with nonrelatives. By 2025, it is estimated that 25 percent of those over 60 and 40 percent of those over 75 are likely to be living alone. Some 40 percent of older people living with their families reportedly face abuse, but only 1 in 6 cases are actually reported.

For these people, the proposed law offers a chance for dignity and financial stability.

The "Parents and Senior Citizens bill, 2007" states that adult children and grandchildren who earn incomes are required to maintain and take care of their parents or grandparents.

A senior citizen – who could be a biological, adoptive, or stepparent – who is unable to maintain him or herself would have the right to apply to a tribunal for a monthly allowance – up to Rs. 10,000 ($250) – from their child or relative.

Any relative of a senior citizen who is in possession of property or who stands to inherit the property of the concerned senior citizen would be liable to provide maintenance.

The law also states that those who refuse to pay the fees can face up to one month in prison.

"Our message is that older people do not need charity or sympathy," says Anjali Raje, a sociologist from the Pune-based Community Aid and Sponsorship Program, an advocacy group that works primarily on behalf of children."They need respect, companionship, and dignity."

Legal questions remain

But experts warn that several legal holes must be filled in the bill before it is made into a law. In its current form, the bill does not address the needs of senior citizens who do not have children or property.

Another shortcoming, experts and advocates say, is that the law would only provide for senior citizens who are older than 60 years.

"Many women are widowed before their attaining the age of 60 years and their maintenance should be ensured in case of destitution," says Nandita Banerjee, a senior citizens' projects manager at the Dignity Foundation, a social services organization for elderly Indians that is based in Mumbai (Bombay). "And indigent, unemployed men [who are] below the age of 60 years and not eligible for old age pension have the right to be maintained by their adult earning children."

The proposal also does not make it entirely clear how the state will deal with kids who can't afford to pay for their parents. India's Ministry of Social Justice and Empowerment in New Delhi says its officials are in consultation with various nongovernmental organizations to discuss the legal gaps.

But beyond the purely legal difficulties, many parents say they would be reluctant to use the law to sue their own children.

"No parent would like his child to be penalized for not showing regards to them," says Ananta Khudaskar, whose son walked out with his wife and daughter a year ago, leaving the frail man to survive alone on a small pension. He's bedridden, and there's no one to take care of him.

Mr. Khuduskar's son, Vinayak Khuduskar, says he sends his father Rs. 500 ($12) each month, a fact his father denies.

The younger Mr. Khuduskar, a clerk who earns $400 per month, says the bill is too one-sided in favor of the elderly. "I won't be able to afford paying up $250 on a regular basis if the law is enforced," he says.

But despite their disagreement, the senior Mr. Khuduskar says his differences with his son stem from more than money. "I want my son's love and affection, not his money."

Overpopulation is only of concern when the population is not productive

BBC NEWS South Asia India's demographic dividend

An excellent exposition on how demographics and population can actually provide benefits unlike the commonly held belief that overpopulation is bad for a country. No, Sir. its only bad if the population does not have opportunities, are not trained and corruption doesnt drain away their efforts. if this is the case, then a country with 2 people will have problems!