Monday Aug 15th reading

One of my university classmates once entered into an inpromptu debate with our labour relations professor on the merits of more private goods. I think I’ve found the perfect rebuttal.

This is the problem with super homogenous societies. Everybody does something out of habit regardless of whether they like it or not, now the silent minorities (or maybe majorities) don’t like it anymore, and have to invent societies to curb it.

Warren Buffet wants to pay more taxes.

Short TED talk for China watchers. Also, as far as interesting interviews are concerned, search for Zhang Xin at Charlie Rose, the female billionare founder of SOHO real estate corporation in China, self-made from factory worker. Sometimes I worry about how much Europe misses out on the emerging economies, sole because there’s so much 1) navel gazing, and 2) constantly looking up to the US as the ultimate measuring stick, even when the US has long moved on to the next bright thing.

August 21 readings

The anxiety economy.

Social and political progress will always accompany economic progress.

Pepe Escobar writes for Al-Jazeera.

I get the feeling that it takes something the proportions of an Olympics to seriously assess a city.

Imagine if Chinese pagentry goes all hard-core tiger mom, this is but a start.

When does economy of scale when it comes to city management stops to make sense?

August 24 reading

Animals felt the tremours first. Red ruffed lemurs win hands-down, a full 15 minutes of warning, if you knew what was coming, that is. Flamingos were also pretty clear in their signalling. Pandas proved useless in this instance.

Rest of the world has to pick up the slack.

So resistance to maintain online annominity is futile?

Cheating on tests, cheating on taxes, principle is the same: when people over-estimate other people’s tendency to cheat, cheating becomes rampant.

Boys are maturing faster too, but we are in general all growing up slower.

Global competition doesn’t spare any specific industry.

And the centre of the world keeps shifting, east and southwards.

Adoptions and corruption.

It’s this time of the year again, amusement park rides and fair foods.

August 17 reading

Will more reverse endorsements like this come about in the coming years? Imagine if Burberry offered British soccer hooligans to stop wearing its pattern.

This will not be without consequences. (h/t JW)

Big Pharma in my opinion is scarier than Big anything else.

I don’t know how I’m supposed to feel about Ron Paul either.

Yet another example of completely unintended progress, this time in Brazil. This is the hilarious 5 point plan in crashing fertility:

  1. Industrialize dramatically, urgently, and late, causing your nation to hurtle through in 25 years what economists used to think of as a century’s worth of internal rural-to-urban relocation of its citizens. Brazil’s military rulers, who seized power in a 1964 military coup and held on through two decades of sometimes brutal authoritarian rule, forced the country into a new kind of economy, one that has concentrated work in the cities, where the housing is cramped, the favela streets are dangerous, babies look more like new expense burdens than like future useful farmhands, and the jobs women must take for their families’ survival require leaving home for ten hours at a stretch.
  2. Keep your medications mostly unregulated and your pharmacy system over-the-counter, so that when birth control pills hit the world in the early 1960s, women of all classes can get their hands on them, even without a doctor’s prescription, if they can just come up with the money. Nurture in these women a particularly dismissive attitude toward the Catholic Church’s position on artificial contraception. (See number 4.)

3. Improve your infant and child mortality statistics until families no longer feel compelled to have extra, just-in-case babies on the supposition that a few will die young. Compound that reassurance with a national pension program, relieving working-class parents of the conviction that a big family will be their only support when they grow old

4. Distort your public health system’s financial incentives for a generation or two, so that doctors learn they can count on higher pay and more predictable work schedules when they perform cesareans rather than waiting for natural deliveries. Then spread the word, woman to woman, that a public health doctor who has already begun the surgery for a cesarean can probably be persuaded to throw in a discreet tubal ligation, thus ensuring a thriving, decades-long publicly supported gray market for this permanent method of contraception. Brazil’s health system didn’t formally recognize voluntary female sterilization until 1997. But the first time I ever heard the phrase “a fábrica está fechada,” it was from a 69-year-old retired schoolteacher who had her tubes tied in 1972, after her third child was born. This woman had three sisters. Every one of them underwent a ligation. Yes, they were all Catholic. Yes, the church hierarchy disapproved. No, none of them much cared; they were women of faith, but in some matters the male clergy is perhaps not wholly equipped to discern the true will of God. The lady was pouring tea into china cups at her dining table as we talked, and her voice was matter-of-fact. “Everyone was doing it,” she said.

5. Introduce electricity and television at the same time in much of the nation’s interior, a double disruption of traditional family living patterns, and then flood the airwaves with a singular, vivid, aspirational image of the modern Brazilian family: affluent, light skinned, and small. Scholars have tracked the apparent family-size-shrinking influence of novelas, Brazil’s Portuguese-language iterations of the beloved evening soap operas, or telenovelas, that broadcast all over Latin America, each playing for months, like an endless series of bodice-ripper paperbacks. One study observes that the spread of televisions outpaced access to education, which has greatly improved in Brazil, but at a slower pace. By the 1980s and ’90s all of Brazil was dominated by the Globo network, whose prime-time novelas were often a central topic of conversation; even now, in the era of multichannel satellite broadcasting, you can see café TVs turned to the biggest Globo novela of the season.

And, finally, number 6: Make all your women Brazilians.

Cairo Times

I heard about this movie last year, and just got around to watching it.

Here’s what the movie got right:

– The film was made in Egypt, you can tell because the whole deal with traffic is pretty much spot on. There’s no real concept of traffic lanes in Egypt, nor does the concept of traffic lights exist – there are none.  Taxis are from the 60s, some release toxic fume from the inside.  But most of the time you are poisoned from the pollution from out the window.  Keeping the taxi drivers awake is also important.

– Patricia Clarkson’s character’s surprise in having men follow her everywhere when she goes out in blouses and skirts.  Women get this pretty quickly: you either cover up, or you are “asking for it”.  Unwanted sexual attention that is.  And it goes without saying that every Arabic men that approaches you on the street will have no trouble telling you how beautiful you are. Without fail.

– There are too many camels and not enough donkeys in the film. There are more donkeys in Egypt.

– Yes, you will be offered hot hibiscus tea all the time, even when it’s 40 degrees outside and you are trying to cool down. Tea is usually served with spoonfuls of sugar.

– The gushing new foreigner, and the cynical long-term expat.

– When Clarkson says, I’ll write something about street children, and Tareq says, you don’t live here, it’s complicated.  Right on.

– Everyone you meet seems to be studying some combination of language and tourism. Becoming a tour guide and one day running their own travel agency seems to be the best prospects for a lot of young people.  I have heard every major language spoken while I was there, including impeccable Chinese while inside the Egyptian Museum.

– “Tomorrow I will take the day off.”  Many Egyptian men that endlessly wander the street seem to have this luxury. Under-employment and outright unemployment seems to be a chronic malaise.

Where it’s not one hundred percent:

– It’s not that hot in November. During the days, you can get by with a sleeveless shirt, but it’s no sweltering heat.  At night, it gets chilly fast.

– Venturing out to the oasis doesn’t really count as going out in Cairo.  The white desert is a few hours away, and you need a 4×4 jeep to get out there.  These trips are done overnight, usually with Bedouin tour guides.

– Sailing on the Nile: it’s almost pointless to sail on the Niles during smoggy days, you can’t see three meters from the boat.  Most people sail at night, while eating on one of those boat restaurants.  Much cooler, plus the pollution would’ve been more settled by then.

– “I’m not married.” That’s what all Egyptian men say.  And they are all married. Some maybe twice. In real life, Tareq would tell Clarkson he’s not married while being married with three kids and they’d carry on a torrid affair. She’d find out years later, heart broken, and go back to Egypt and find a younger lover.

– It’s impossible to just see the pyramids without hoards of people trying to sell you everything from fruits, postcards, to camel rides. It’s not a stroll down the Niles either with the smog and traffic.

– And no other tourists around the pyramids?  What is this, a scene straight from Murder on the Niles?

– The movie portrayed the relationship between the two characters as some kind of accidental rediscovery of love for Clarkson and Tareq.  In reality, Egyptian men make a sport out of flirting and sleeping with foreign women.  The worst are those in Cairo that wander the streets, and tour guides. It is not uncommon to see very young Egyptian men with middle-aged European women.  There are even villages in Upper Egypt filled with such couples. The sexual politics of Egypt is very particular, and this is but a romanticized version of such daily occurrences.

Behavioural science behind making vacation plans, and Monday links

Business

China needs a service-sector revolution
project-syndicate.org– Employing workers in sectors where their productivity is stagnant would not be a recipe for social stability. 
Environmentalists as battered spouses
american.com– Greens keep returning to their abuser after another promise to do good, but nothing in President Obama’s oil spill speech should offer them any hope that the administration is really going to change. 
Flight of the desktops
slate.com– The shift to portable machines fits larger social trends. More Laptops, netbooks, and tablets fit into the new lifestyle. Desktop don’t. 
Pleated pants watch: Don’t you want to be “clean”?
slate.com– Marketing men’s fashion is tricky because, for the majority of male clothes-wearers, the goal is to convince them that it is not fashion. 
BOOM: Big issues
gq.com– Lost in the catastrophic aftermath of the Gulf of Mexico oil spill is the gripping tale of the rig workers and the Coast Guard crewmen who rescued them. 

Finance & Economics

Germany’s super competitiveness
VoxEU.org– German wage restraint has led to a real depreciation of Germany’s fixed nominal exchange rate vis-à-vis its Eurozone members, helping Germany to win market shares at the expense of Southern Europe. 
On the lessons to be learned from the elimination of the Canadian federal deficit in the 1990s
worthwhile.typepad.com– If you’re going to count on exports to sustain aggregate demand while your government cuts back, you have to figure out which foreign economy is supposed to absorb all that extra production. 
Why it’s different this time for housing
online.barrons.com– For the economy as a whole, and housing in particular, restraint in borrowing will keep housing well below past cycles, no matter the level of interest rates or house prices. 
Gartman: Gold is good but Euro is doomed
Credit Write Downs– With the euro crisis and European credit easing, people have awoken to the fact that the euro is also a fiat currency and that the Europeans may be willing to depreciate the value of their currency as well. 
On your Marx
nplusonemag.com– It would add a nice dialectical twist to the future history of our period if it could be said that, around the time the post-Maoist Chinese took up shopping, the post-bubble Americans turned to studying Marx. 
Alan Greenspan v. Paul Krugman
Capital Gains and Games– The fiscal debate has become so polarized that combatants on both sides are glossing over what they don’t know. 

The rest
The breeders’ cup
WSJ– As you weigh your options, don’t forget that the costs of kids are front-loaded, and the benefits are back-loaded. …
The best vacation ever
Boston.com– Research looking at how people actually feel about their vacations suggests that, by and large, they remember them warmly — more warmly, in fact, than they feel while taking them. 
Tea and coffee ‘protect against heart disease’
news.bbc.co.uk– Drinking several cups of tea or coffee a day appears to protect against heart disease, a 13-year-long study from the Netherlands has found. 
Healthy at any age
services.newsweek.com– Medical science has generated vast amounts of data, and laypeople have more access to them than ever before, but look closely at that information, and it starts to seem disturbingly incomplete. 

Criticism from inside the EU

Harsh criticisms over this non-optimal currency zone is now emerging from within the EU.

Here, president of the Czech Republic talks about the conflict that many Eastern European countries faced after the fall of communism: the need for closer integration with the west, in this case, western Europe, while shying away from the statist aspirations spear-headed by France and Germany that only reminded them days of Soviet rule.

People like me understood very early that the idea of a European single currency is a dangerous project which will either bring big problems or lead to the undemocratic centralization of Europe. My position was clear: With all my reservations, we had to apply for EU membership, but at the same time we had to fight against projects such as the euro.

His criticism separated the idea of European cooperation, from the euro project itself, which for all intents and purposes, has failed.  Klaus the economist says:

The huge amount of money that Greece will receive can be divided by the number of the euro-zone inhabitants, and each person can calculate his or her own “contribution.” However, the “opportunity” costs arising from the loss of a potentially higher growth rate, which is much more difficult for a non-economist to imagine, will be far more painful. I do not doubt that for political reasons this price will be paid and that the euro-zone inhabitants will never find out just how much the euro truly cost them.

Unsurprisingly, as the leader of a country that’s suffered dearly in the hands of communism, Klaus the politician minces no words in his critique of opaque bureaucracy centered in Brussels.

The recent dealings in EU headquarters in Brussels—literally behind closed doors—about the aid package for Greece demonstrated that there is no democracy there. The German-French tandem made the decision on behalf of the rest of the euro-zone countries, and I am afraid this will continue.

Not everyone heeds to this view, of course.  As late as March, many eastern and central European states still aspire to join the euro party, many already pegging their own small currencies to the euro.

Euro malaise continues: politician down, businesses worried, and rat race re-assessed

While Horst Köhler’s resignation cannot be directly attributed to the euro crisis, it certainly epitomizes the clash between the post-war political configuration in Europe and the increasingly impatient Germany.

In the past, Germany has always provided the passive sheet-anchor stability that allowed Europe to work. Occasionally a Schmidt or a Kohl would find partners and a surge of European integration would take place. But now Germany has no idea of what to do next. It will not admit that its economic weltanschauung, based on relentless exports and damped-down internal demand, is now part of the European and world crisis of capitalism.

The new Germany would like to behave as a normal nation and certainly has national security on its mind.  Both domestic and European-wide politics have yet to catch up with it, even when the question of military interest is framed within the scope of expanding and protecting its economic interest.

Köhler made the point that German military capability was relevant to German interests, including German economic interests. As the world’s second biggest exporter after China, Germany has a self-evident interest in keeping the world as open as possible for the free flow of trade and commerce, and to help defeat the growing scourge of piracy. This is so worrying Nato policymakers that an entire session at the Nato parliamentary assembly’s spring session this weekend in Riga was devoted to the question of how to ensure peace and free traffic on the high seas.

Some political and business leaders are quietly applauding the continual slide of the euro as one of the tools to stimulate exports in the region, others argue that a weak euro do more harm than good in eroding business confidence in the region, which may prove to be the worst legacy resulting from this ongoing fiasco.

The biggest worry for European business, however, is not so much the decline of the euro itself but rather what it says about the European economy. European governments will have to reduce public spending dramatically to allay the market’s fears. Spain has already announced that it is cutting public-sector wages by 7% and Greece by 16%. This will inevitably remove spending power from the European economy and so dent its short-term prospects.

… The introduction of the single market and the single currency were supposed to spark a glorious period of innovation and productivity growth. This has not happened. The European economy remains dependent on long-established corporate champions such as Daimler and on public-sector jobs. The old continent has dismally failed to create local equivalents of America’s Microsoft and Google.

The FT has an interesting piece that questions the impact of fiscal austerity on a continent that, for the past few decades, consistently prioritized lifestyle and the ubiquitous work-life balance ahead of economic growth.

But while taking a more relaxed attitude towards the pursuit of wealth may make sense as a personal philosophy, it is an uncertain guide to public policy. It is relatively easy for the comfortable middle classes to play down the need for economic growth. But absolute poverty still exists, even in western societies, and adjusting to a stagnant national income can be a painful process, as many European countries may soon discover.

It would be a curious irony if the spiritual east embraced the ruthless pursuit of wealth just as the western nations that invented modern capitalism went for a Zen-like repudiation of materialism. If the pursuit of rapid economic growth became a largely Asian pastime, the global balance of power would also change in ways that might make life in the west considerably less comfortable.

For better or worse, it seems unlikely that many western politicians, outside the environmental movement, will repudiate the pursuit of economic growth as one of the goals of public policy. Some have occasionally toyed with this thought. In 1979, US President Jimmy Carter made a speech in which he argued that “owning things and consuming things does not satisfy our longing for meaning”. A year later, he went down to defeat to Ronald Reagan, whose most effective electoral tactic was repeatedly to ask Americans if they felt better off than four years previously.

The fact is that people like piling up material goods. Mr Sarkozy may argue that there is more to life than economic growth – but, on a personal level, he seems to be quite fond of flashy watches and holidays on millionaires’ yachts.

It is also clear that for China, now the world’s second-largest economy, high rates of growth remain an absolute imperative – both to buy social peace and to drag hundreds of millions of people out of poverty. Even among Indian intellectuals, the Gandhian disdain for materialism is becoming less common, as economists, politicians and a burgeoning middle class embrace the pursuit of wealth as both a personal and a national goal.

Desperate and starving, North Korea may open up for more tourist dollars

Far away from the global recession and genuine economic uncertainty brought by, arguably, too much globalization; North Korea is convulsing in its own form of cash crunch in utter isolation.

After revaluing its currency late last year (read: chopping off two digits and obliterating what meager savings its people had over the past decades), the mass can no longer smuggle food from China into the North Korean black market, where a large number of people get their foods from.

In a new year message that tried to both assuage its external enemies while placating rising internal dissent, North Korea has promised to work on “food security”.

But facing almost unprecedented protests – which is most likely still very low considering it is North Korea, Dear Leader is getting desperate.

So desperate that it’s willing to open up the country more to tourism, and perhaps not just the tour-group led ones that showcase massively choreographed performances with slogans and cards?

Last year, the country took in 280 US visitors only. But they may very well want to open the door a tad wider, especially if Kim Jong Il’s arms exports continue to get seized.