Paatje is still the same!

After four years of not seeing him, we finally met again yesterday. I was a little worried... I was told that I should expect to see an aging man. He'd been always my role model. A man with integrity, commitment, faith, and power. And, high quality sense of art and humor. Yesterday, I saw him again. Was so relieved: he's still the same person.... Good to see you back, Dad!

El Norte

His name is Enrique and her name is Rosa. They are brother and sister, survived from murder attempts by their parents killer in Guatemala. They are trying to find a good life in the North. El Norte, the United States of America. What they do find is hardlife. They loose more than they get. Rosa looses her soul. Enrique looses her sister. El Norte is no paradise....
Good movie. As Ebert introduces it: this is an American epic...

Spoiled BraD

I knew it! Of course Brad is happy to be an intellectual giant. Oh, narcissism...

Got one giga?

Google launches a webmail with huge capacity and without popups. Sign up here (Note: this is a beta version and for now, it's exclusive for Blogger users).

Maddux, not Clemens -- Aria's protest

Commenting on my post yesterday, Aria seems bothered by Solow's comparing Clemens to best economists. He believes, it should be Maddux, his favourite. Sorry, I know nothing about baseball! Aria recommends me to read the bestseller Moneyball.
By the way, thanks for the link to a guy who declares DeLong as his blogger hero -- I'm not kidding!

Wheelan said it all

In Naked Economics, Charles Wheelan writes about how important human capital is:
"... I once interviewed Robert Solow... I asked if it bothered him that he received less money for winning the Nobel Prize than Roger Clemens, who was pitching for the Red Sox at the time, earned in a single season. 'No', Solow Said. 'There are a lot of good economists, but there is only one Roger Clemens.' That is how economists think..." pp.100.

The Sixth Ebertfest is coming to town

The Sixth Roger Ebert's Overlooked Film Festival is coming. Checked on to my calendar: "My Dog Skip" and "Once Upon a Time... When We Were Colored". What I like from Eberfest is discussion following movie screening. For this year, Ebert promises, there will be a surprise guest onstage after My Dog Skip. Kevin Bacon or Diane Lane?

Why I don't care with "fair trade" coffee campaign

I am a coffee addict. Lately, all coffee houses that I go to offer "fair trade" coffee. Even Starbucks claim to only use coffee from fair trade (I don't buy their claim). The idea is to protect small coffee farmers. But I am always suspicious with this kind of "protection". Because there is always room for manipulation in the middle. And as this article notes, "...another sticking point inside the movement are the requirements for being certified. Germany's Fair Labeling Organization (FLO), which certifies all fair-trade coffee in the world, charges farmers $2,431 to certify plus an annual base of $607 for recertification and $.02 per 2.2 pounds of coffee sold under the fair-trade label..." And you say you're helping the poor farmers?

Of course it's exclusive!

Is there a single organization in the world that is NOT exclusive? This whole criticism against certain political parties for being "exclusive" really annoys me. For example, one party is accused for being exclusive only for a certain segment of muslim population. Other is "exclusive" for being open only for christians. The critics say they can't accept such "exclusiveness" because it will lead to antidemocracy. To me, the criticism is just another form of religio-phobia. Why are those critics fine with political parties that are "exclusive" for "nationalists", "exclusive" for labor, etc? The worst thing is that, they seem not to understand that any organization is inherently exclusive. If an "organization" is open to all types of segment, personality, religion, education, etc, then why was it formed in the first place? By definition, organization is a group of people with the same objectives. Repeat: the same objectives. Is it possible that everybody's objectives are the same? No. That's why you form an organization. And that means: exclusive!

Moving more leftly?

I wrote once that I was a moderate, libertarian leftist. Yesterday Aria and I drove up to Chicago. We listened to Al Franken's audiobook, "Lies" (I hate long titles, so check it yoursef). Interestingly, I found myself agreeing to almost all of his argument against conservatives. Maybe it's not really the ideology that I am against with, totally. But I surely hate Ann Coulter, racist Russ Limbaugh, and especially King Liar Bill O'Reilly. Maybe that's why I agreed with all the bashes by Franken. Even though he seems to have big mouth too, sometimes. Am I liberal?

Dangerously comfortable zone

Had a chat with a colleague over the phone. He is a deputy director of leading research institute and also a respected economist. He was concerned with the fact that most bright, young scholars have been spoiled too much by the media. The information business is making good deal of money selling academicians into the public. Doesn't matter you're really capable or not. As long as you can talk with confidence, the media will grant you a celebrity label on your chin -- even though you are cheap talking. Some get really spoiled. They think they have achieved everything, while in fact they are rotting themselves. We agree, no matter how busy we are with projects, pursuing academic achievement should never stop. Otherwise, we're entering that red zone. One way to avoid this, we figure, is to maintain professional network with international academia.

First mover advantage vs "Burn the ship" strategies

I offered my rationale and strategy for voting: "... Before you vote for a particular party, let your friends (and enemies, if you have some) know that you will. Make sure you reveal your preference...".

Aria Novianto, on the other hand, offers a "first mover advantage" theory: "...In the bargaining game first mover has a huge advantage. Especially in short (one) period game. First, you set your terms, what you really want out of the candidates. Offer your support to your first choice candidates, their only options being to accept or reject your terms. If it's still early in the game, they know you have the option to offer it to others.... know this is too simplistic, but in general first mover has an upper hand....".

It appears, we are looking at voter's behavior from different perspectives. Aria limits other peoples' options, make them accept his terms, because that's the better choice they have left with. Mine is, to limit my options, in order to increase my commitment, while trying to persuade others. The latter follows "burn the ship" strategy of General Tariq bin Ziyad in the war of Gibraltar.

This guy loves Rubin and hates Mankiw

I wrote once, Krugman likes Rubin. Here's more by Paul himself.

"...it's pretty clear what John Kerry's economic philosophy will be. He's surrounding himself with advisers closely tied to Bill Clinton, and even more closely tied to Robert Rubin, the legendary former Treasury secretary. In office, we can surmise, Mr. Kerry would follow a Rubinesque strategy of bringing long-term budget deficits under control through a mixture of tax increases for upper-income families and spending restraint. No doubt he would move slowly on deficit reduction as long as the economy remained weak, but his advisers would tell him, as Mr. Rubin told Mr. Clinton, that responsible long-run budget policies are good in the short run, too, because they help keep interest rates low...".

And, he really hates Mankiw: "...George Bush has, of course, tried to be the anti-Clinton in all things. His advisers rejected Rubinomics and hearkened back to Reaganomics, insisting that long-run tax cuts, never mind the effect on the budget deficit, are the key to growth. For three years, they've had nothing but red ink to show for their efforts. Now they've had one good but not great month...."

Romer on tragedies of the commons

Attended a talk by Stanford's Paul Romer on the tragedies of the environmental and intellectual commons. He argues that assigning property rights to environmental commons has been proven effective in many cases. However, when it comes to "intellectual commons", property rights system has to deal with way more complex an issue. He uses downloadable music as an example. It's very hard to impose property rights or royalty system in that particular market. Napster has pirated, been sued, reborn again with supposedly legal face. iTunes is more legally careful. But still, you can't stop all the illegal downloadings. How to solve this? Romer (and I agree) points out that the big chunk of rents go to the record label companies. They are the ones who inflate the price of ideas (read: music). [I am told by a friend once that Dave Matthews has solution to this: leave record companies, do life concerts].

Another good point from Romer's talk. He said, the Who's guitarist Pete Townsend was the founder of feedback (this is a technique in twisting sound in guitaring). What if Townsend assumed a monopoly rights to it? Meaning, everybody who wanted to use feedback technique has to play royalty to Townsend? Then we would never heard of Jimi Hendrix improvisation.

But I have a small problem with Romer's matrix. He graphs a matrix of commons against property rights. In the first column are environmental commons, and second intellectual (he used "ideas"). Listed in order of strength in property rights protection imposition in the first columns are land (100% protection), fresh water (about in the middle), and common pastures and fish in the ocean (both are 0%). In the ideas column, list include recorded music (100%), pharmaceuticals and "cross-docking" [like what WalMart does] (about in the middle), and PCR (polymerized chain reaction -- I have no idea what this is) and oral rehydration therapy (both are 0%). Look closely. In fact Romer mixes up between private goods and public goods. Land is 100%. Sure, because it is (in almost all cases) very close to being a private good (of course "assigning property rights" is trivial. You don't even assign it! It is earned). And recorded music, being more complex, is a quasi-public good: it's nonrivalrous, but it's excludable (trust me). He should have been more clear on this.

Update: My friend Basanta Dhungana has additional observation from the Romer talk yesterday. Basanta summed up: "...[Romer] opined that knowledge that generates knowledge (knowledge spill over) should not be regulated with full property right. Assigning full intellectual property right precludes other to innovate further. Therefore, government should invest on such knowledge based innovation..."

Econ: Toughest after CS, Phys, and Math?

Craig Newmark, guest blogger of Marginal Revolution writes on graduate study in economics. Interesting. Among all: "... of 28 graduate fields, economics ranks fourth-toughest (below computer science, physics, and math)...". Craig quotes this from an article by Roessler in econphd.net. The article also has tables of GRE score comparisons and econ depts rankings.

Cap-and-trade not good for mercury?

So one of my committe members asked me in my defense day. Why so bother with PCB pollution? Those heavy metals stay at the bottom of the lake. How should that be a concern for homeowners? As I noted in some footnotes, these pollutants may cause cancer and other defects. I should have really moved them from footnotes to the text. Today Krugman writes about policy on mercury, one of the PCB substances. He goes further as to assess the recent policy administered by the goverment, the cap-and-trade policy. He points out that C&T is only good for light pollutants. But it would be wrong to use it to control heavy metals. As for mercury case, polluters would rationally buy the permits and... we're waiting for the next Chernobyl.

Movies and economics

I was thinking last night about home. I pictured myself back to classroom, trying to make economics less dismal than what appears in textbooks. Among others, I will most likely teach Environmental Economics. The toughest part, I believe, is to convince students that this topic is important. Alas, they won't pay attention if it is not interesting. Should I just go with the standard procedure: intro - externality - social cost vs private cost - optimum policy - valuation technique - current issues - exam? If I go that way, more than 50 percent students would yawn in my classes. So here's what I'm going to do. In the first day, I will have them watch "Erin Brockovich". I will ask them to write a review for me. In the next meeting, I will discuss what "externality" is, using that movie as the illustration. Throughout the semester, I will also entertain them with "A Civil Action". Get the idea? Indeed, if I have to teach business class, I would prepare movie session with "Wall Street". Similary, "Rosencrantz and Guildenstern are Dead" for game theory and probability classes, "Disclosure" for labor economics, "It's a Wonderful Life" for risk and uncertainty class.... [stop me, I could go on and on....]

D'oh!!

The Simpsons stars are on strike for raise. Dan Castellaneta (Homer), Nancy Cartwright (Bart), Yeardley Smith ( Lisa), Julie Kavner (Marge), Hank Azaria (Moe and Apu) and Harry Shearer (Mr. Burns and Ned Flanders) are "... demanding a a salary of $360,000 per episode, or nearly $8 million for a 22-episode season. Each actor currently is paid $125,000 per episode, the source said..." Some say this is too much (peek up at alt.tv.simpsons). But come to think of it, The Simpsons contributes more than $1 billion a year for Fox! If Ray Romano can get $1.8 million per episode of Everybody Loves Raymond, why can't Homer and friends get some increase? Go for it, Homer!

Fish had hands?

Amazing report from Scientific American (subscription might be required). A team of Univ. of Chicago scientists found a fossil of "tetrapod" -- swimming creature with four hands, from 365-million years ago. Read longer account from Science (with a link to pdf version).

Smear without Fear

Krugman goes light today, and I don't think I want to use other phrase to discuss his column: Smear without Fear -- it really fits, already. This is about Letterman's Night Show's take on Bush last week. Letterman diplayed a clip showing a boy got bored with Bush delivering a speech. The boy's gesture was extremely funny. When I saw the rerun (I was then waiting for a connecting flight from Denver to Bloomington in O'Hare airport, Chicago) in the CNN, I couldn't help myself laughing outloud. But, honestly, I wasn't sure if it was real or not. I didn't even notice it was originally brought by Letterman. Anyway... Krugman writes about it today. The story about how the CNN anchor Kagan had to explain what was "supposedly" going on (allegedly under White House pressure), how Letterman denied it, etc are even funnier than the show itself. It appears that Krugman just got another small little side weapon to attack W. A quote for you:
"... And administration officials shouldn't be able to spread stories without making themselves accountable. If an administration official is willing to say something on the record, that's a story, because he pays a price if his claims are false. But if unnamed "administration officials" spread rumors about administration critics, reporters have an obligation to check the facts before giving those rumors national exposure. And there's no excuse for disseminating unchecked rumors because they come from "the White House," then denying the White House connection when the rumors prove false. That's simply giving the administration a license to smear with impunity..."

Reading Rubin

My pick for in-flight reading in my trip to DC and CO was Robert Rubin's memoar, "In an Uncertain World". I haven't finished it, but it sure is a really entertaining reading. Chapter One was about the Mexican 1995 crises and how the White House, Fed, and Treasury handled the fiasco. How the "three marketers": Alan Greenspan, Robert Rubin, and Larry Summers struggled to convince the Congress and the American public to disburse a $25 billion rescue package to Mexico. Thrilling and dramatical! The book tells the story of how many leading figures in the American politics (D'Amato, Gingrich, Bush, etc) responded to Rubin's proposal. The chapter also pictured how cool Bill Clinton reacted and how he was willing to risk his career by endorsing the most "unpopular, risky decision" offered by Greenspan-Rubin-Summers trio to deal with the "first crisis in the new millenium". I can see why Krugman who hates so many people loves Rubin. Great book -- so far.

Mining law vs decentralization

Just got back from Denver, CO, preceded by a short reroute to Washington D.C. Met with collegueas: Mbak Ani (IMF), Mbak Lala (LPEM), Mas Iben (Embassy), Mas Yossi (WB), Sjamsu (Georgetown Univ.). Started working on a project about Indonesian mining industry, a collaboration between the Univ. of Indonesia and Colorado School of Mines. A little worried with too many political interests involved: mining associations, Department of Energy and Mines, Department of Forestry, and the Ministry of Environment. The main objective of the project is to draft a new mining law for Indonesia. We have produced a world-class investment law in 1967. Many countries copied it. We had a two-tier contract law that were adopted by Ghana and other countries. But things have changed rapidly. Other countries have reformed their law and regulations. We haven't. Now that everybody in Indonesia talks about decentralization, there is an urgent need to adjust the law. Main problem is that there is a huge hole between the central government and the local, independent bodies ("bupati"). How do we deal with mining contracts subject to this decentralization euphoria? This is a big issue. And politically sensitive. An international, independent institution would be ideal for doing the assessment. But the IMF and the World Bank have bad reputations back home. That leaves the universities and independent research centers. And that's how the LPEM was involved.