New year's tears

Tsunami (photo courtesy of ThinkQuest)

Suboptimal riposte

Please, all you who appreciably want to donate to or to help the victims of the Tsunami, think twice. No, I'm not saying you should not participate. Your helps and donations are of course 'priceless' (or so you think). However, many, so many of the donations so far are suboptimal. People keep sending unprocessed food (raw materials) and nobody can cook over there! Even drinkable water is terribly scarce. The lists of volunteers keep expanding every minutes. But many of those who want to be sent are not the ones the victims need. They need paramedics. Not just anybody who in turns need to eat there too. If you have all the sympathy for Aceh's tsunami victims, and you have the urge to go there, make sure you can help, not to be helped. And those who want to donate, please donate money, so the centers whatever they are can use it to buy relevant goods: body-bags, disinfectants, medicine, biscuits, bottled water, etc. I agree with a friend: this requires a careful organization. And a quick, systematic one. Yes, military.

RIP: Susan Sontag

In the aftermath of the Tsunami, in the midst of my condolences to the people of Aceh and the surroundings, another one eulogy goes to Susan Sontag in New York. Unlike you, Dave, I am not happy about that.

Put back economics into Environmental Economics!

I was a little surprised today and last week to observe my students presentation on their environmental economics projects. ("Surprised" being a euphemism). Not a single group used economics to explain environmental policy recommendation. (Well there was one, and it was sadly irrelevant). Of course this is not entirely their fault. I felt guilty: I might have failed to teach them. Or, to make me feel better, I was silently blaming those who had supposedly taught them the basic microeconomics. Should really find out another way to deliver this course next time. One group dared to suggest zero pollution, while still implying the need of, well, growth! Others were not even suggesting anything: it's all about issues, newspaperic issues. I felt terribly, terribly guilty...

So in this other class, that was scheduled to be discussing sustainable development, I started with a pamphlet: "I'm an 'environmental economist', and I am going to talk today about 'environmental economics'. But first, forget about that first word in those two phrases. We here are learning economics. Later we are going to apply it to help solve the environmental problems". I went on talking about how I am more persuaded by Bjorn Lomborg instead of by the infamous doomsters, Club of Rome. How I agree more with Becker than with Posner regarding the Kyoto Protocol (by the way, the Becker-Posner Blog is getting better: in addition to their global warming debate, the recent one on disease and growth is noteworthy -- Becker being anti-Malthusian and Posner pro).

The challenge we in the field face these days is arguably not how to contribute alternative solutions to the environmental problems. But first of all, is to convince the general public that economics offers a way around them. And the difficulty lies in the fact that most of the economic approaches are simply... unpopular.

Tsunami next door

May they rest in peace.

Starbucks assumes my taste

I don't hate Starbucks like these people. In fact, I go to Starbucks quite often. But today I happened to notice: Starbucks assumes my (and maybe your) taste. I was ordering a small, black coffee, as usual. This waitress, she handed me instead a mug with ... hot water and black ... well, tea. Me complained. She goes: "Oh, sorry, Sir. So sorry. Let me make it up for you. I'll make you a ... cappuccino, alright?". WHAT? Why did she think I valued cappucino more than black, plain coffee? Of course I said no, I want BLACK coffee! (today they had Sumatran).

Bear with me -- more interesting one coming. There I was, sitting on a comfy couch reading my book. One subchapter done, and time for the next gulp of coffee. But, hey, what's that little thing moving around on my coffee? A suicidal fly! So, yes, I stood up for the second complaint of the day. This time, another waitress apologized. She goes: "Oh my good God! Please forgive us, Sir. I'll change your coffee..." (At the moment, I thought, she didn't need to apologize. The dead fly should). Anyway, she gave me another mug of coffee. Thanks God, it's black. Only that... "Here you are, Sir. As a guesture of our state of sorry, we give you a ... bigger mug... no extra charge"... Oh, my God! Did she think I ordered small coffee, because I couldn't afford the bigger one? Even worse, did she think I valued bigger mug of coffee higher than smaller one? (Now I think she should apologize!)

Both fiascos once again prove: most people confuse value with price. True, price should reflect value. But my valuation might be different from yours and therefore I might not think the price is right (for me), while you think so (for you). Disaster comes when you think the price is right for your valuation, and ... mine.

Chatuchak

Posted by Hello (photo courtesy of AsiaTravelTips)

...as you might wonder what it looked like...

Krung Thep

Hi, I'm blogging from an inn in Bangkok. Attended the annual forum of EADN -- a child organization of the GDN. We were discussing the current development issues and challenges in the East Asian region. The forum ended on Friday, but I extend my stay until tomorrow morning. A friend has been very generous to let me stay in his place yesterday. But today he has to go to Myanmar, so here I am updating you from this bed-and-breakfast place: yes, it is in that kind, but ironically, this is where I can get good internet connection (even in the hotel the forum was held, the connection sucks!). And, it's inexpensive. I pay only 550 bahts (that's 12 bucks) for one night plus another 100 bahts for a whole-day access to wifi-hotspot. Cool! (By the way, this place is recommended by Lonely Planet).

OK, what was it I wanted to write you again? Right, the EADN forum. But... I guess I change my mind. I'm more excited to talk about Bangkok, the Oriental City. I was expecting a city similar to Jakarta: busy, crowded, traffic jam every where. Well, it turned out very close to it, except that, Bangkok now has a very nice subway system that started to operate just recently. It is integrated with the older skyway train. This of course is a very big improvement to the city's problem of congested traffic everyday. However, to my surprise, not many people use that subway! A Thai friend of mine explained that people have not adjusted well with the new facility. In addition, for now it only serves limited routes. People still prefer the traditional road traffic. And that explains why the road is still chaotic. A stranger like me is probably one of the few people who can enjoy the nice subway. It's very clean and ... well, new. You don't even find posters or ads down there. Never mind stores or ... hobos. But maybe my friend is right: it takes time. I was wondering: in the next annual forum, I will probably see a very different subway... (if the subway were in Jakarta, you know exactly what I mean)

Another difference I notice between Bangkok and Jakarta is prices. To say it directly, it's cheaper here. I went to the famous weekend market, Chatuchak yesterday. It was awesome. You can find almost everything very cheap. Not only that, they imitate branded products massively. I saw an American female tourist bargaining over a fake Rolex watch. She got it for ... less than 50 dollars! (It might break after two weeks, but who cares?)

See it yourself. And don't you forget to try this.

So long, departure tax

(Sorry, can't find the link, this is a news from a high level official -- will update you later). The departure tax is going to be abolished (it takes 4 years to finalize, eh?). Good. But wait, rumor has it, application fee for passport will increase ... 5 times as much! So, those who travel frequently will be happy. Those who happen to travel only once in their lifetime will be sad. The former consist of, mainly, business people, academics, bureaucrats, etc. The latter, maids, low-wage workers, etc. See my point?

Becker-Posner Defense: Still Silly

So replies Becker, there are 3 options: 1) pre-emptive attack, 2) wait and retaliate, 3) accumulate information before decide. The most economic way today, says Becker, is the first one. Because, "deterrence is less powerful now as a tool against certain enemies than during the cold war when the adversary was a single major state..."

And Posner adds, "The case for preventive war must be debated on its merits rather than rejected outright on the ground that any war that is not defensive is aggressive and therefore "illegitimate.""

Again, Prof. Becker and Judge Posner: I can still use your arguments in favor of Iraqis and against Americans. Think about it. How would you define "irresponsible nations with powerful weapons"? What precludes it to be... the U.S., Professor? As for your assertion to merits: there you go. It has been going on forever, Judge.

Stiglitz vs Stiglitz

The Indonesian Economists Association (ISEI -- No, they don't have a website!) and Economica, a student-run organization at the Department of Economics University of Indonesia (I recall they HAD a website -- but it's lost in the cyberspace, no?) are hosting a public lecture featuring the Nobel laureate Joseph Stiglitz. Mind you, "public" here means you have to pay Rp 5 millions for the ticket. That's $500. Man, I'd rather use that money for more useful activities like this, this, or this.

Yet, I might be part of the conspiracy now. The committee has asked me to become a jury for an essay competition. The idea is, the first and second winner will get free ticket to the Stiglitz lecture. They have to write a good essay exploring Stiglitz's economics views on development. I repeat: on development. That means, he's going to talk again about the increasingly boring stuff of globalization (for better or worse). So yes, it's about Stiglitz the anti-IMF, not about Stiglitz the respectable risk-and-information economist. It seems to me, people take Stiglitz too much for a somewhat incorrect cause. Just because he won the Nobel prize for economics, people think he is good in everything. Well, I think he is good but he is certainly not the best, when it comes to politics. Or put it this way: when I need to learn about politics (or, even, development), I would not read Stiglitz for reference. As for a econ-popularizer, I'd rather read Krugman.

Poor Stiglitz. As I always say in my microeconomics class: read Stiglitz papers in JET (on risk and uncertainty), QJE (on imperfect information), and AER (on monopoly and the rate of extraction of exhaustible resources) -- each requires subscription. THEN, go ahead read the entertaining "Globalization and Its Discontents" or "Roaring Nineties". Then you can see his split personality: smart economist and somewhat-lousy political analyst.

So yes, Stiglitz is kind of overrated. But he seems to enjoy it. Well, At least I hope he will clarify what his Nobel was for.

A note on the essay competition. These 5 finalist essays: most of them mistake Stiglitz. Some even seem to think Stiglitz won the Nobel for his war against the World Bank, IMF, and the WTO. (Oh, by the way, I found one plagiarist. Rather than grant him a $500-worth ticket, I would suggest to fine him $1000 for the cheat).

Becker's debut: not cool

I'm always admirer of Gary Becker. But his justification on "preventive" war sounds silly -- the silliest "economics" I have ever read. If you say it's OK to attack Iraq for its "intention" to harm America, why shouldn't that apply the other way around, too? You watched Minority Report too much, eh?

Kids bricolage to economics

I have these 3 nieces and 2 nephews at home. They are cute and they fight all the time. One day I was going to take shower. Pachi saw me and asked me to lift her up. So I invented this new tool to lift kids around. I used my towel (don't worry, it's clean) as a hammock-like seat; my hands being the trees. She sat in and I carried her around in the house for 3 minutes. Well, not really 3 minutes, because Aisya, Fadhl, and Figo started to demand their rights, too (the 1 year old Dzakira had no idea what was going on). That morning I ended up carrying 4 kids around, one at a time. Muscle ached a little, arrived office in rush. Later when I came home I was welcomed by this cute riot once again.

So, it's time for economics. I gave them 5 pieces of card-sized paper each. Each paper is worth one ride with me, in the morning. For night ride, they should return 2 papers. I slowly explained them the idea. Aisya dan Pachi got it straight. Fadhl and Figo, the youngers had hard time, but slowly understood by way of example. I added, they should live with the 5 papers they each have for one week.

The next morning, Pachi "bought" 2 morning-rides from me. Then, she realized, she only had 3 left. She approached her brother Fadhl. She told him she had chocolate bar, and how about she gave it to Fadhl for 1 "ticket". Fadhl refused, but the cousin Figo accepted her offer. Market works. -- Ehm, not quite so. The next next morning, Fadhl lost one of his tickets. And Pachi somehow had an extra ticket...

Today they all demand their next batch of tickets...