November 2006 Archives

Assorted and Interesting

Markets in Everything – God Helmet

If you’re interested in a short cut to spiritual experiences, neurobiologist Michael Persinger has devised a wired helmet that he says induces religious experiences in those who wear it.

Another helmet called Shakti – claimed to be better than the above one (price $220)

Shakti and the Koren Helmet - which is more effective?
God on the Brain - questions and answers
The God Experiments
This IsYour Brain on God
God moves in mysterious waves
Visions or Partial-Complex Seizures?
The Significance of Ellen White's Head Injury
Neuroscience - the New Philosophy
Neuroethics (podcast)

Sex and Statistics

In the Chimp world;

“In contrast to humans, the researchers found, male chimps find older females more desirable, approaching them more often to mate, fighting more with other males over them and mating with them far more frequently than with younger females. That is true even for higher-ranking male chimps, which have more choice of mates. The findings confirm the earlier results of other researchers.

"Multiple lines of evidence indicate that unlike humans, female chimpanzees become more sexually attractive with age," the researchers report in the Nov. 21 issue of the journal Current Biology. "This study demonstrates that male chimpanzees do not merely disdain young females, but actively prefer older mothers to younger mothers."

In the Human world;

Braving "robbing the cradle" jokes, almost one-third of women between ages 40 and 69 are dating younger men (defined as 10 or more years younger). According to a recent AARP poll, one-sixth of women in their 50s, in fact, prefer men in their 40s…

But what about the notion that men are "hard-wired" to seek a smooth-faced, curvy receptacle for reproduction and thus are drawn to younger women? "Humans are relatively flexible species," Michael R. Cunningham, Ph.D., a psychologist in the department of communications at the University of Louisville, tells WebMD. "Factors other than biological can be attractive. You can override a lot of biology in pursuit of other goals."

Can Google bring democracy to Arabs?

Technology never ceases to amaze me;

“Since Bahrain’s government blocked the Google Earth website earlier this year for its intrusion into private homes and royal palaces, Googling their island kingdom has become a national pastime for many Bahrainis.

The site allows internet users to view satellite images of the world in varying degrees of detail. When Google updated its images of Bahrain to higher definition, cyber-activists seized on the view it gave of estates and private islands belonging to the ruling al-Khalifa family to highlight the inequity of land distribution in the tiny Gulf kingdom.

A senior government official told the Financial Times that Google Earth had allowed the public to pry into private homes and ogle people’s motor yachts and swimming pools. But he acknowledged that the government’s three-day attempt to block the site had proved counterproductive.

It gave instant publicity to Google Earth and contributed to growing sophistication among Bahrainis in circumventing web censorship.

It also provided more ammunition to democracy activists ahead of parliamentary elections this Saturday, the second since King Hamad bin Issa al-Khalifa began introducing limited political reforms in 2001. “

Via FP blog.

Mahmood’s Den
Bahrainis use Google Earth to spy on royals' palaces

Turkey Fact of the Day

“Take the results of a new poll by Tesev, a think-tank which studies society and religion: the number of Turks who put their Muslim identity first has risen to 45% from 36% in 1999; but over the same period the number of people who favoured sharia law dropped from 21% to 9%.”
- From The Economist, The pope's controversial trip to Turkey

Allure of Islam Signals a Shift Within Turkey

A Real Liberal Under Attack in Turkey for Defending Freedom

“Kemalist secularism is not well understood by Americans and Europeans. As Atilla put it some years ago (about ten, I think) at a seminar I organized for him at the Cato Institute, “People say that you have separation of church and state in America and we have separation of mosque and church and state in Turkey. In America, that means freedom of religion. In Turkey, it means freedom from religion. There is a great difference between the two.” Private property, contract, and limited government should create the framework for people to decide on their own, through voluntary cooperation, whether and how to build a mosque, a church, a synagogue, or anything else. Such decisions should not be made by state officials.”

The Pope, The Condescending, and Closet-Intolerance

The Benefits of Obesity: Part II

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Three and a half long years have passed since I insisted that there must be some benefit to obesity (namely the enjoyment of food), and finally the headlines seem to agree with me. But the article entitled Odd benefit to obesity glosses over the price the obese must pay to get their benefit:

Overweight heart patients were about 75 percent less likely to die than their underweight counterparts during a five-year study because they were given aggressive medical procedures, a new study found.

Obese patients, who are often younger and have fewer unrelated health concerns, often are better candidates for intensive and invasive therapy for coronary artery disease than underweight patients, who are most likely older and in worse health, according to a study presented yesterday at an American Heart Association meeting in Chicago.

In other words, obese people have heart problems much earlier in their lives than the non-obese, and because they're not yet suffering from other problems, they're given more severe treatment and respond better to it.

A heart problem in one's 60s is one hell of a cost to bear to get the benefit of better response to treatment.

UPDATE: Here's a cute argument. Obesity + Liposuction = Stem Cells. With bonus quote from the Koran:

"…It may happen that you dislike a thing which is good for you,

and it may be that you love a thing which is bad for you.

Allah knows, while you know not." Qur'an [Surah Baqara 2:216]

Podcasts- Intelligent Design, God and Style

Intelligent Design

Richard Dawkins and God

Dawkins debate about Altruism

Virginia Postrel on Style

Nature and Religion
Marine scientist Walter Stark, a pioneer of coral reef research who believes the modern view of nature is religious. It holds that nature is pure and perfect, while humans are separate and soiled. He argues that urban Australians' view of nature is problem-obsessed, because problems offer magnificent opportunities to politicians, academics, the media, and of course professional activists

A new branch of moral philosophy

Nick Drayson is a zoologist and a spinner of yarns. His outrageous book, Confessing a Murder, explains the stunning coincidence of Wallace and Darwin 'discovering' natural selection. Now he is in search of platypus memorabilia for the National Museum in Canberra.

Moral Minds: The Evolution of Human Morality

Sex, Drugs and Economics

Note; A lot of these podcasts are available for limited time, so download now.

Politics give you Gas

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A recent working paper from the IMF- Political Price Cycles in Regulated Industries: Theory and Evidence. Here’s the conclusion;

“This paper presented a model of industry regulation where information asymmetries and the government-regulator’s interest in being re-elected may generate a political cycle in the regulated price. Quarterly data covering 32 countries during 1978–2004 provided strong evidence of the occurrence of a political cycle in gasoline prices.

Our model characterizes the behavior of the government-regulator as an attempt to maximize an objective function comprised of the social welfare in the regulated market and the government’s chance of being reelected. The social welfare function follows a stochastic process in which the weights attributed to consumers’ utility and firms’ profits are determined by a shock at the beginning of an election period. This shock may reflect changing political alliances or economic conditions exogenous to the regulated market. Because this shock is not immediately observable to consumer-voters, the incumbent government-regulator may have incentives to set a price below the welfare-maximizing price to signal its pro-consumer nature and thus attract more votes in the upcoming election. In fact, our model derives equilibrium regulation strategies in which some types of government-regulator will lower the regulated price in an election period, thus generating a political price cycle in the regulated industry.

Unschooling for democracy

It’s always harder to forge your own path without someone telling you what to do.”- Peter Kowalke, 27, unschooled as a child

Gary at Spontaneous Order makes a good comment about why some people may not like homeschooling;

From the demand side, the reason why parents may not want to teach their own kids (other factors being held constant, like their income, time availability, their educational level) at home also occured to me while reading the same NYT story. Peoples' innate fear to go about their own way without guidance. People simply want to be told what to do. This seems related to what Hayek has said in Fatal Conceit. That contemporary people still have that lingering longing to be led, part of the legacy we inherit to this day from the time when we live in a small community and individuals' decisions are made according to the directions of the wiseman in the group.

The other day I heard the exactly the same comment made by a local chief from one of the islands commenting on 3rd November 1988 attempted coup incident –‘The greatest worry we felt was that we had no one to show us the direction, show us the guidance from the capital, Male’. And we had to plan and do things on our own.’

I don’t know whether our first priority aught to be a mentality overhaul before we can think about democracy?

Capitalism, not democracy leads to peace?

capitalismpeace.JPGDon Boudreaux links to an interesting working paper by Columbia University political scientist Erik Gartzke; The Capitalist Peace.

The following is the conclusion of the paprer.

“This study offers evidence suggesting that capitalism, and not democracy, leads to peace. Additional research is needed to corroborate, extend, and even refute the findings reported here. One must be circumspect in questioning a body of evidence as large and as carefully constructed as that on the democratic peace. Still, economic liberals have long seen in free markets and prosperity the potential to discourage war. A century ago, the “conventional wisdom” looked more like this study and less like that of democratic peace researchers. While past arguments were clearly simplistic and overblown, there does now seem to be grounds for reconsidering liberal economic peace theory.

Critics can differ with my revision of classical arguments, or can plausibly challenge the assumptions on which my version of the capitalist peace is built. The statistical models I develop, and the findings that I present, can be altered, possibly in ways that again show that democracy matters. For now, I hope my claims are coherent, empirically plausible, and at the very least intellectually provocative. What is the “larger” relationship between development, capitalism, and democracy? It might be that democracy actually lies behind the apparent impact of capitalism on peace. Still, the world was not always made up of 50% democracies. Little attempt has been made to rule out the possibility that democracy and peace have common causes. A logical extension of this study is the exploration of determinants of political and economic liberalism, though resolving these more complex causal arrows would seem to require a far more profound set of conclusions about the world, ones that are still under construction in comparative politics, economics, and other fields.

Guide to Flirting

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An interesting article from the latest edition of The Economist; Flirting-Don't misunderestimate yourself;

Dr Hill showed heterosexual men and women photographs of people. She asked them to rate both how attractive those of their own sex would be to the opposite sex, and how attractive the members of the opposite sex were. She then compared the scores for the former with the scores for the latter, seen from the other side. Men thought that the men they were shown were more attractive to women than they really were, and women thought the same of the women.

Dr Hill had predicted this outcome, thanks to error-management theory—the idea that when people (or, indeed, other animals) make errors of judgment, they tend to make the error that is least costly. The notion was first proposed by Martie Haselton and David Buss, two of Dr Hill's colleagues, to explain a puzzling quirk in male psychology.

As studies show, and many women will attest, men tend to misinterpret innocent friendliness as a sign that women are sexually interested in them. Dr Haselton and Dr Buss reasoned that men who are trying to decide if a woman is interested sexually can err in one of two ways. They can mistakenly believe that she is not interested, in which case they will not bother trying to have sex with her; or they can mistakenly believe she is interested, try, and be rejected. From an evolutionary standpoint, trying and being rejected comes at little cost, except for hurt feelings. Not trying at all, by contrast, may mean the loss of an opportunity to, among other things, spread one's DNA.”

Our minds are not what we think

From FT a case of patient with Cotard syndrome;

"She was completely preoccupied with the thought that she was dead," he recalls. "She kept saying that she'd died two weeks before and was worried about whether my office was heaven or not."

The young scientist realised that Liz was suffering from a rare and strange condition known as Cotard syndrome, which for the sake of brevity I'll define as the delusion that one is dead. The condition was named after the French psychiatrist Jules Cotard who wrote about some classic cases in the late 1800s. He called it delire des negations and described a host of other symptoms including feelings of guilt, denial of body parts and even, paradoxically for someone who thinks they are dead, thoughts about suicide….

Roughly 100 cases of Cotard delusion have been reported in the medical literature, which certainly makes it rare, although not as rare as some other strange delusions, such as the single case of a man with "perceptual delusional bicephaly". He believed he had two heads and was admitted to hospital suffering gunshot wounds from where he'd tried to shoot one off….

Eventually he did get through, and posed a series of questions to assess an aspect of her personality known as her attributional style. Broadly speaking, this measures a person's tendency to attribute events in their lives to themselves (internal attribution) or to other people or luck (external).

Cost Benefit of Bikini Waxes

Tim Harford has put online a recent column of Dear Economist not available on the FT site.

Dear Economist, Bikini waxes: boyfriends seem to like the results, but they hurt. What would you say were the costs and benefits? Yours, Sylvia, via email

Related; Cost Benefit of Circumcision

Podcast of the Day- Lecture 3 Reform and Deregulation

The Boyer lectures by Ian Macfarlene, former governor of Reserve Bank of Australia, continuos;
By the 1970s the world's developed economies were stuck in the worst position they had been in since the Great Depression of the 1930s. Australia shared this experience but, propelled by a program of reform and deregulation, it slowly became competitive again and began to register strong rates of growth. In this environment the corporate sector embarked on an era of heightened activity, driven by massive borrowings, takeovers and mergers. It is now apparent that the implications of sudden financial deregulation were not fully understood, and the dawn of the 1990s would bring with it new challenges for those charged with navigating the twin hazards of boom and bust.

Listen to the podcast. Some excerpts below;

“Let me digress for a moment to discuss another epithet routinely applied by those opposed to economic reasoning, which is to refer to economics as the dismal science. Whenever I hear this term, I wonder how many people who use it know its origin. It was coined by Thomas Carlyle, in 1849, in an essay called, Occasional Discourse on the Negro Question, in which he argued for the reintroduction of slavery into the West Indies. He viewed the former slaves as 'indolent, two-legged cattle, who should be subject to the beneficent whip'. It is extraordinary that the author of these views which were reactionary and racist even by the standards of 1849, should have had the temerity to refer to his opponents, the most prominent of whom was John Stuart Mill, as representing the dismal science, when all they were doing was arguing that freed slaves should have the same rights as other free people. Mill wrote a reply to Carlyle expressing views that would be widely held today, but unfortunately it is Carlyle's throwaway line that has endured, not Mills' sensible reply….

The budget of the insurgents revealed

iraqwar001.jpgNYT reports on the financing of the insurgency in Iraq;

“The insurgency in Iraq is now self-sustaining financially, raising tens of millions of dollars a year from oil smuggling, kidnapping, counterfeiting, connivance by corrupt Islamic charities and other crimes that the Iraqi government and its American patrons have been largely unable to prevent, a classified United States government report has concluded.

The report, obtained by The New York Times, estimates that groups responsible for many insurgent and terrorist attacks are raising $70 million to $200 million a year from illegal activities. It says $25 million to $100 million of that comes from oil smuggling and other criminal activity involving the state-owned oil industry, aided by “corrupt and complicit” Iraqi officials.

As much as $36 million a year comes from ransoms paid for hundreds of kidnap victims, the report says. It estimates that unnamed foreign governments — previously identified by American officials as including France and Italy — paid $30 million in ransom last year…

The group’s estimate of the financing for the insurgency, even taking the higher figure of $200 million, underscores the David and Goliath nature of the war. American, Iraqi and other coalition forces are fighting an array of shadowy Sunni and Shiite groups that can draw on huge armories left over from Mr. Hussein’s days, and benefit from the willingness of many insurgents to fight with little or no pay. If the $200 million a year estimate is close to the mark, it amounts to less than what it costs the Pentagon, with an $8 billion monthly budget for Iraq, to sustain the American war effort here for a single day.

My Stock Broker is an ANN

Its seems like Artificial Neural Networks (ANN) are ready to invade the stock markets;

“Artificial intelligence is becoming so deeply integrated into our economic ecostructure that some day computers will exceed human intelligence,” Mr. Kurzweil tells a room of investors who oversee enormous pools of capital. “Machines can observe billions of market transactions to see patterns we could never see.”…

But some are aware that a former Microsoft executive and chairman of the Nasdaq stock market, Michael W. Brown, is an investor in Mr. Kurzweil’s new hedge fund, FatKat, and that Bill Gates once described him as “the best person I know at predicting the future of artificial intelligence.” …

“Five years ago it would have taken $500,000 and 12 people to do what today takes a few computers and co-workers,” said Louis Morgan, managing director of HG Trading, a three-person hedge fund in Wisconsin. “I’m executing 1,500 to 2,000 trades a day and monitoring 1,500 pairs of stocks. My software can automatically execute a trade within 20 milliseconds — five times faster than it would take for my finger to hit the buy button.”

Studies estimate that a third of all stock trades in the United States were driven by automatic algorithms last year, contributing to an explosion in stock market activity. Between 1995 and 2005, the average daily volume of shares traded on the New York Stock Exchange increased to 1.6 billion from 346 million….

People who know the subject should teach?


Andrew Leigh links to an article about a program called “Math for America”, whose goal is to improve the quality of maths teachers in US;

“Math for America started over a game of poker. In 2003, Simons was in Berkeley, Calif., raising money in a charity poker tournament, playing against other heavyweights from the New York investment world. When he looked around the room, it struck him that the assembled brainpower and capital could be used for greater good. Chatting with a few other former mathematicians, Simons put forth an idea to improve the state of math education in America. It was a notion he'd unsuccessfully tried to publish as a New York Times editorial a few years before: Have the people who know the subject teach the subject, and provide them with the money, training, and support they need to do so.

Math for America addresses a simple, but profound problem: Nearly 40 percent of all public high school math teachers do not have a degree in math or a related field. Even the best curriculum in the world, the reasoning goes, isn't going to inspire students if unqualified individuals are teaching them. (In a recent round of testing, the U.S. placed 24th out of 29 nations in math proficiency.) If knowledgeable teachers exude passion for the subject, they stand a greater chance of pushing students toward careers in math in science that are the technical backbone of the country's economy.”

It’s an interesting idea but I’m not sure whether it will be that successful. People who know the subject are not necessarily the best teachers.

Horse Fish?



Local fishermen found the following weird looking fish- if any body knows the scientific name for it, drop in a line.

Quotes of the Day

“You have shown yourself to have no respect for life, liberty or any civilized value. You have shown yourself to be unworthy of your office, to be unworthy of the trust of civilized men and women,”… “You may succeed in silencing one man but the howl of protest from around the world, Mr. Putin, will reverberate in your ears for the rest of your life.”
- Alexander Litvinenko

"Meanwhile, as far as I know, in the medical report of British doctors, there is no indication that this was an unnatural death. There is none. That means, there is no reason for discussion of that kind.”
- President Putin

Informed advice for anyone contemplating homicide (podcast)
If you are really keen to murder a spouse, which chemical element would you choose? Arsenic is SO last year. Mercury is so - well, mercurial. Cambridge chemist John Emsley offers informed advice for anyone contemplating homicide who would like to show a little flair and impress the team from CSI. He’s the author of the book, The Elements of Murder: A History of Poison.

Mexico Facts of the Day

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Mexico is the country of inequality. No where does there exist such a fearful difference in the distribution of fortune, civilization, cultivation of the soil, and population.”
- Alexander von Humboldt, Problems And Progress in Mexico, c. 1800

In Mexico the law is an aspiration, not the norm. We made many laws to look good, not to obey them. There is no public condemnation of lawbreakers.”- Bernardo León, a lawyer who advised Mr Fox on judicial reform.

- By most estimates, as many as 80 percent of Mexicans do not have bank accounts.

- Compared with countries that have similar levels of development, World Bank figures show that Mexico is well behind Brazil and Chile in an important measure of banking activity — private credit as a percentage of total output. In Mexico that figure was 18 percent in 2003, compared with almost 40 percent in Brazil.

- Mexican workers are only a third as productive as those in the United States. Foreign direct investment, apart from a couple of big bank takeovers, has fallen from 3.5% of GDP in 1994 to less than 2% a decade later.

- The Inter-American Development Bank estimates that remittances from Mexicans abroad will total $24 billion this year, about a third more than the flow of foreign direct investment

Wal-Mart in Mexico

I will say that I miss the old Always Low Prices blog that I worked with Kevin on. It was an opportunity to learn and investigate various aspects of the retailer that often get lost in discussions surrounding it. Just yesterday, I had the opportunity to correct somebody misinformed about the company.

Walmart has come in the crosshairs of people who think they can gain mileage from attacking the company. A successful company like WM will always have its detractors. I, on the other hand, admire the company for the success that it has had both for its shareholders and for its effects on society as a whole. This article on Wal-Mart in Mexico is another example of the transformative effects the company can have:

One possible reason for the different receptions in the United States and Mexico is that, by most estimates, as many as 80 percent of Mexicans do not have bank accounts. Because Wal-Mart plans to offer such accounts, local groups apparently had difficulty trying to stir up public outrage.

Working-class Mexicans have been largely shut out of traditional banks by high fees, minimum balance requirements and intimidating paperwork. Community banks barely exist.

In this venture, Wal-Mart, the world's largest retailer, still might be the little guy, at least for now. Among Wal-Mart's competitors in the banking business are global banks like Citigroup and HSBC, which have made almost no effort to attract the vast bulk of working- class Mexicans.

The authorities, beginning with the governor of the Mexican central bank, Guillermo Ortiz, have blessed the entry of retailers into banking as a way to reach people without accounts.

In its statement last week announcing that Wal-Mart, along with four other banks, had received preliminary approval, the Finance Ministry said that it expected the new banks to create more competition and serve markets that the country's five dominant banks ignore.

Wal-Mart, as readers of the old ALP will know, has had effect on raical relations in Mexico because of their use of common looking people in their advertising. What they did to integrate people of all shades of skin color and of continetal orgin, they can do in financial services for the poor of that country. Cheap banking is something we take for granted here in the U.S., but is necessary for advanced economies. This is great news and will probably illustrate what free market capitalism can achieve without government social engineering. I used to think that free market capitalism was amoral, but Wal-Mart has gone a long way to dispel that notion with me.



The term altruism was coined by the 19th century sociologist Auguste Comte and is derived from the Latin “alteri” or "the others”. It describes an unselfish attention to the needs of others. Comte declared that man had a moral duty to “serve humanity, whose we are entirely.” The idea of altruism is central to the main religions: Jesus declared “you shall love your neighbour as yourself” and Mohammed said “none of you truly believes until he wishes for his brother what he wishes for himself”. Buddhism too advocates “seeking for others the happiness one desires for oneself.”…
If both mankind and the natural world are selfishly seeking to promote their own survival and advancement, how can we explain being kind to others, sometimes at our own expense? How have philosophical ideas about altruism responded to evolutionary theory? And paradoxically, is it possible that altruism can, in fact, be selfish? Contributors include Miranda Fricker, Senior Lecturer in the School of Philosophy at Birkbeck, University of London, Richard Dawkins, evolutionary biologist and the Charles Simonyi Professor of the Public Understanding of Science at Oxford University and John Dupré, Professor of Philosophy of Science at Exeter University and director of Egenis, the ESRC Centre for Genomics in Society (from BBC’s In Our Time).

Niall Ferguson: The War of the World
The 20th century was a period of unprecedented economic growth and scientific discovery, but equally a century of unparalleled bloodshed and warfare - estimates suggest that 1 in every 22 deaths in the 20th century were the result of violence. Niall Ferguson argues that the intensity of the 'hundred years war' can be explained by the factors of ethnic disintegration, economic volatility, and empires in decline - forces which are to be found behind sites of contemporary conflict, notably the Middle East.

Can chocolate cure hypochondria?
Associate Professor in Latin Humanism Yasmin Haskell from the University of Western Australia talks about the history of hypochondria and benefits of chocolate.

More on Milton Friedman

David Friedman, son of Milton Friedman notes the geographical diversity of comments for condolences about his father on his blog. One thing I noticed was that there was not a single Arab country and only three were Muslim nations. I don’t know whether this means anything about the state of mindset about the people of these countries.

Milton Friedman and the Social Responsibility of Business
Milton Friedman: A Tribute
The Draft: Charles Rangel, Milton Friedman, and William Meckling
Milton Friedman's Wisdom and the Impending London Olympics

Milton Friedman, Friedrich Hayek, Augusto Pinochet, and Hu Jintao: Authoritarian Liberalism vs. Liberal Authoritarianism

The other Milton Friedman by Cal Thomas
The Other Milton Friedman: A Conservative With a Social Welfare Program by Robert Frank

Milton Friedman-A heavyweight champ, at five foot two
From the archive-A Tract for the Times;
"Writing in the preface to a later edition, Milton Friedman recalled that his book's views “were so far out of the mainstream that it was not reviewed by any major national publication... though it was reviewed by the London Economist and by the major professional journals.” More than 400,000 copies of “Capitalism and Freedom” were sold in the 18 years after it was first published."

Economists and blogs

Greg Mankiw links to an article in LA Times on economics blogs (the article mentions that Lawrence Summers writes a blog- I’m not sure whether this is the case).

Recently The Economist had two articles on economics blogs; Pigou or NoPigou? and Economists' blogs; The invisible hand on the keyboard.

As for me one reason why I blog relates to the fact in high school the economics teacher we had showed up to class for about 3 months of the two year period. I wish we had access to economics blogs or for that matter the internet. If I had been of any help to any student in similar circumstances I would have achieved my main objective.

My challenge for Econ bloggers; To sponsor a student (high school or undergraduate) in a developing country, be a tutor and mentor for him/her and be a personal guide till the student finishes school.

Collina’s stuff on auction

A local daily Haveeru has organized an auction of items used by the world's most popular referee, Pierluigi Collina of Italy during the 2002 FIFA world cup finals. The proceeds of the auction are to go to families who lost their homes in the tsunami disaster of 2004. They will be on E Bay soon, auction closing on the 25th December.

Related; Some cool pics of Pierluigi Collina

Podcast of the Day- Islamic Finance for US

Marc Chandler, global head of currency strategy at Brown Brothers Harriman & Co., talks about opportunities in Islamic finance and the outlook for the U.S. dollar and euro (Bloomberg podcast).

Britain can be gateway to Islamic finance- Gordon Brown (earlier post)
The State of Islamic Finance in Australia
Short Selling and the Travesty of Islamic Finance

Book recommendations from Tom Palmer

“People who wish to understand the Islamic tradition would do well to try to start with an examination of the role that Islam played in the development of law, rather than with the various Muslim-bashing books that have appeared recently”, says Tom Palmer.

Book recommendations;

Wael B. Hallaq’s The Origins and Evolution of Islamic Law

Harold Berman’s Law and Revolution: The Formation of the Western Legal Tradition.
Law and Revolution, II: The Impact of the Protestant Reformations on the Western Legal Tradition

Mohammad Hashim Kamali’s books-Principles of Islamic Jurisprudence, Freedom of Expression in Islam , Freedom, Equality and Justice in Islam

This Law of Ours and other essays, by Muhammad Asad

Muslim Basher Robert Spencer Upset at my Dismissal of his Book (Tom Palmer post)

Islam and Economics- blog of Professor at Rice University

Islam Then and Now
Daniel Peterson believes the key to understanding present Islamic attitudes lies in understanding the religious and philosophical texts of its past.

Interpreting culture
The distinguished American anthropologist Clifford Geertz died last month

A proposal to make Sunni Arabs happy

Two Princeton professors Shivaji Sondhi and Michael Cook, have a guest column at Econbrowser on a suggestion to improve the stake of the Sunnis in Iraq;

“The problem from the start has been the stake of the Sunni Arabs. This was entirely predictable, as no minority used to a disproportionate share of power gives up this privilege easily-- the relative deprivation simply excites too many fears. One only has to look at nearby Lebanon for an example…

To this end we propose that the United States make a financial commitment to Iraq which takes the form of ensuring that its Sunni provinces get oil revenues proportional to their share of the population over the next decade or possibly more. Initially, it should take the form of simply funneling an amount equal to the Sunni share directly to these provinces. This would at the same time increase the size of the national pie, which would help to appease the Shia and the Kurds, and might also reduce the tension over Kirkuk. In later years the commitment would transition into an insurance policy.

What would be a rough upper bound on such a commitment? To date Iraq has produced a maximum of 3.7 million barrels per day (bpd) of oil. This was back in 1979, and the country hasn't actually produced more than 3.5 million bpd since 1990. It is quite unlikely that either figure will be exceeded anytime soon. Taking the 1979 figure and a profit of $50 per barrel, we are talking about revenues of approximately $67 billion a year. Of this we may estimate the share of the Sunni majority provinces at about 20 per cent, or $14 billion. Today their share of the 2 million bpd production is closer to $7 billion."

Podcast of the Day- First genocide of the 20th Century?

One million people were killed in the Armenian genocide in 1915. It was the first genocide of the twentieth century, and in many ways set horrific template for all the genocides that came after it - including the Holocaust. The Armenian genocide has been in the news a bit lately because the French National Assembly and Senate have passed a bill that makes denying the Armenian genocide a crime.

Taner Akcam argues that issue of the genocide is inextricably linked to the idea of modern Turkey, and says that if Turkey is going to make it as a democracy it must start facing up to its past. Akcam is part of a small group or Turkish scholars who are starting to challenge the Turkish governments' account of the genocide - and he is the first specialist to actually use the politically and morally charged word "genocide' to describe the killings. The release of his book in Turkey earlier this month was met with irate criticism in the mainstream Turkish press. Listen to the podcast (from Radio National).
Related; Genocide?

Ukraine and fiscal space for growth

A recent World Bank report on Ukraine- Creating Fiscal Space for Growth: A Public Finance Review;

“Recent economic and fiscal trends in Ukraine, combined with the financing requirements of the reform agenda, have brought fiscal pressures to the fore. Ukraine’s economy grew by more than 50 percent between 1999 and 2004, but growth decelerated from 12.1 percent in 2004 to 2.6 percent in 2005. Contributing to this slowdown were less favorable terms of trade dynamics (in particular for metal prices)1 and a substantial deceleration in investment demand (partly as a result of uncertainty about government policies and cutbacks in public investment). Despite the recovery of the economy in the first semester of 2006 (5 percent growth y/y), the short term outlook is still threatened by potential further increases in energy prices in 2007. At the same time, increasing public spending threatens to crowd out the private sector. Driven by hikes in pensions and public sector wages, public spending soared from 39.4 to 44 percent of GDP in 2005, placing significant pressure on public finances. This high public spending and its consumption orientation risks generating inflationary impulses and higher interest rates, and eroding household wealth. Ukraine also has a high tax burden which discourages the private sector.”

The price of delaying democratic reform?

Jonathan at The Head Heeb has interesting analysis of recent riots in Tonga;

“It looks like Tonga will finally have its democracy, but at staggering economic and social cost. And the price of withholding democratic reform for so long may in fact be even greater than it first appears; during the past three years of turmoil, Tongans have become used to revolutionary protest, and the effect on national politics and governmental legitimacy may remain with the country for a long time.”

Trouble in Tonga (Radio National Podcast)
NYT new blog The Lede has more on the Tonga riots
Information hub on the Kingdom of Tonga
Country profile: Tonga

Vernon Smith on Dark Matter

An interview with Dr. Vernon Smith in the latest edition of Journal of Financial Transformation;

Q: Do you agree with Ricardo Hausmann and Federico Sturzenegger about the fact that as a result of dark matter, the U.S. current account deficit is not as large as many believe?

Prof. Smith: There may be some measurement issues, which is what Hausmann and Sturzenegger are talking about, but what I am more concerned about is the fact that the dollar has taken such a pounding because of our financial policies. The deficit itself is not a problem. In fact, we had a deficit before the dollar came down

Perspectives on “Dark Matter”
Can Gravity Be Defied?
What Are the Risks to the United States of a Current Account Reversal?
Transcript for the Annual Research Conference: How Does Capital Account Liberalization Affect Economic Growth?

This and That

Some articles worth reading;

The Great Liberator- Lawrence Summers on Freidman
On Milton Friedman's Ideas—BECKER
Milton Friedman's Case- Arnold Kling

The Young Economist by Lizbeth Scordo
Three Things You Don't Know About Aids In Africa by Emily Oster
Methodology Matters by Edward L. Glaeser
Economics focus- Third thoughts on foreign capital

How last century's money wars may lead to healthcare, pension reform
Managing Change; Is the Penny Worth Keeping?
The Flintstone EffectTracing wealth back to the Stone Age by Joel Waldfogel
My Boss Is 65 and Pregnant; How fertility advances could allow women to take over the boardroom By Tim Harford

The New Baby Boomers by Francois Bourguignon
The Zigzag of Politics- David Warsh
DEAL SWEETENERS- James Surowiecki
More Things Economists Don't Say

Patriots vs. Redskins
Beyond Insurance: Weighing the Benefits of Driving vs. the Total Costs of Driving- VARIAN
Want world peace? Support free trade. By Donald J. Boudreaux
The Undercover Economist: Round numbers By Tim Harford

Who's Counting: Which 'Experts' Make Better Political Predictions?
Grading the Pollsters
Why the successful prefer being average to extreme
America’s Anti-Environmentalists

It's time for truth in property taxation
The Social Responsibility in Teaching Sociobiology
Tracing the divine obsession; Also known as `the game of games,' chess has seduced kings and queens, beggars and madmen for 1,500 years.
When Legal Meets Marketing

How the Web Prevents Rape
Murphy’s law
What did Descartes really know?

Podcast of Day- Boyer Lectures

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Lecture 2: From Golden Age to Stagflation
For the world's developed economies, the end of the second world war was the trigger for almost 30 years of sustained growth. Ian Macfarlane says the Keynesian system of economic management had served policy-makers well, but asks had Keynesian policies been pushed too far, beyond their natural limits? Inflation began to rise in all countries in the late 1960s and early 1970s. When the first OPEC oil shock occurred it would bring the post-war boom to a sudden close, and give rise to a new condition—stagflation. Some excerpts below;

Milton Friedman on Iraq War

“Mr. Friedman here shifted focus. "What's really killed the Republican Party isn't spending, it's Iraq. As it happens, I was opposed to going into Iraq from the beginning. I think it was a mistake, for the simple reason that I do not believe the United States of America ought to be involved in aggression." Mrs. Friedman--listening to her husband with an ear cocked--was now muttering darkly.

Milton: "Huh? What?" Rose: "This was not aggression!" Milton (exasperatedly): "It was aggression. Of course it was!" Rose: "You count it as aggression if it's against the people, not against the monster who's ruling them. We don't agree. This is the first thing to come along in our lives, of the deep things, that we don't agree on. We have disagreed on little things, obviously--such as, I don't want to go out to dinner, he wants to go out--but big issues, this is the first one!" Milton: "But, having said that, once we went in to Iraq, it seems to me very important that we make a success of it." Rose: "And we will!"

-In an interview on WSG; The Romance of Economics Milton and Rose Friedman: Dinner with Keynes? Yes. War with Iraq? They disagree

Cruise, Holmes leave for Maldives honeymoon

Maldives is now the honeymoon capital for celebrities;

“Newlyweds Tom Cruise and Katie Holmes have jetted off on honeymoon to the Maldives after a fairytale wedding in a 15th century castle in Italy.

The guest list read like a Who's Who of Hollywood as Cruise and Holmes tied the knot in Bracciano on Saturday.

There were fireworks inside and out too as the couple sealed their vows with a "never-ending kiss".

The kiss lasted so long it caused guests to shout "stop, stop!" said Giorgio Armani, who attended the wedding and designed the outfits of the bride, the groom and their baby, Suri.

The couple flew out of Rome on Sunday morning for a honeymoon in the Maldives, said Ciampino airport spokesman Adriano Franceschetti. The rest of the wedding party was due to fly to Los Angeles later on Sunday.”

Katie Holmes Tom Cruise Wedding Pictures
More links here at A Socialite’s life

Some Podcasts

Andrew Leigh interview about Milton Friedman (second item on the podcast)

Interpreting culture
The distinguished American anthropologist Clifford Geertz died last month. This week, we take a respectful but sceptical look at his work, its origins in philosophy and its consequences for philosophy. Savage Minds have more Clifford Geerz.

"Shifting aims, moving targets: on the anthropology of religion"- a lecture by Clifford Geertz

Postmodern Theory

Imps of the Mind Gone Awry: Obsessive Compulsive Disorder
Rituals, checking the stove, repetitive thoughts. Everyday patterns for all of us, but when they go awry, the impact of these imps of the mind is devastating and life-consuming. This week, a provocative theory with new, convincing science - could Obsessive Compulsive Disorder in some children be triggered by a common bout of strep throat? And, nipping the obsessions and compulsions in the bud - one parent's story, and a pilot project already changing the lives of young people plagued by OCD. More links here.

The State of Russia
Professor Christopher Read examines the current state of Russia and its changing political and economic position

Libertarian Paternalism Is Not an Oxymoron
Cass Sunstein, professor of Jurisprudence at the University of Chicago Law School

Anecdotes about Milton Friedman


"Everybody loves to argue with Milton, particularly when he isn't there."
- George Shultz

"Everything reminds Milton Friedman of the money supply. Everything reminds me of sex, but I try to keep it out of my papers."
- Robert Solow

Brad DeLong writes;

General William Westmoreland, testifying before President Nixon's Commission on an All-Volunteer [Military] Force, denounced the idea, saying that he did not want to command an army of mercenaries. Milton Friedman interrupted him: "General, would you rather command an army of slaves?" Westmoreland got angry: "I don't like to hear our patriotic draftees referred to as slaves." And Friedman got rolling: "I don't like to hear our patriotic volunteers referred to as mercenaries. If they are mercenaries, then I, sir, am a mercenary professor, and you, sir, are a mercenary general." And he did not stop: "We are served by mercenary physicians, we use a mercenary lawyer, and we get our meat from a mercenary butcher"

Tracing a Statistic: Teen Suicide


Two-thirds the way down on page 15 of Alexandra Robbins' The Overachievers, I come across this statistic:

[Overachiever culture] has diminished leisure time for all ages. It is believed to be a major factor in the 114 percent spike in suicide rates among fifteen-to-nineteen-year-olds between 1980 and 2002.
I'm not an expert on these types of important social issues, but that number didn't look quite right to me, so I flipped to the endnotes, and found:
15.114 percent spike: The important article by Stepp, Laura Sessions. "Perfect Problems/" Washington Post, May 5, 2002.
Unfortunately, that article is not online (for free), but using my local library's electronic database, I found it:
"I've seen a dramatic change in the stress level of these kids," says Carolyn Callahan, who has worked with high achievers for 30 years, currently at the National Research Center on the Gifted and Talented at the University of Virginia. "They're going through the motions and not enjoying what they're doing." The perfection machine, what she calls a treadmill, "has created a situation where they don't feel they have a choice to get off."

One report in a newsletter by Callahan's center worries that the characteristics of these students, including "perfectionism" and "supersensitivity," put them at risk for suicide, and notes that the proportion of young people ages 15 to 19 who have taken their own lives has jumped 114 percent since 1980.

We're getting warmer. A simple Google search revealed the report in the newsletter. It starts off like this:
The rate of suicide among children 10 to 14 years of age increased 100% between 1980-1996. Among youngsters 15-19 years of age, the rate of increase was 114%, making suicide the fourth leading cause of death for this age group (U.S. Department of Health & Human Services, 1999).
So it is not true that the suicide rate for 15-19 year olds increased by 114% from 1980 to 2002 -- 2002 being when the WaPo article was written --, but from 1980 to 1996.

But I had to keep going. Is that just as depressing statistic even true? We're still not sure how this data was created and validated. According to the footnote, the HHS report is actually the Surgeon General's Call to Action to Prevent Suicide 1999. Another Google search reveals the SG report, in which we find.:

From 1980 to 1996, the rate of suicide among persons aged 15-19 years increased by 14% and among persons aged 10-14 years by 100%
Umm.... It's 14%, not 114% percent!?! Let's go to the source of those statistics! I would, but those aren't sourced at all in the SG document!

Fortunately, hard data do exist, but I found it difficult to source the original CDC table ("Death rates for 72 selected
causes by 5-year age groups, race, and sex: United States, 1979–1997. Worktable GMWK 291 Trend B"). These folks do cite the data, and do me one better by graphing it:


We're interested in the white squares. So the real growth in the 15 to 19 year old suicide rate is 14%, not 114%. The red line shows where a constant suicide rate would have ended up in 1996. The blue line shows where the alleged 114% increase would have left us in 1996.

What an utter refusal to check sources and validate simple statistics! THIS IS NOT MY JOB, nor the job of any of Ms. Robbins' readers. It's the job of the author and editors. I don't know if I should even bother continuing to read the book at all, as I've spent 1/2 hour tracking down just one horrendously wrong data point. How many more will be this wrong???


I'm not saying teen suicide isn't a problem, or that we should pretend that overachievers don't have problems. I am saying that understanding the actual scope of the problem is vital in arranging our political priorities. And for that we need solid data, not this crappy series of citations of tertiary sources.

Moral: Next time you hear a politician say we need a "national discussion" on an issue, realize that the type of "facts" they want to talk about are frequently no better sourced than the example cited here.

Smart Sanctions- would it work?

Lonely Planet, one of the leading international travel guidebook companies has advised its readers to support a Friends of Maldives (FOM) campaign for a selective boycott some of the most popular resorts in the country. The following are excerpts form the guide as stated on FOM website- I couldn’t find it on the Lonely Planet website. I’m not convinced that this kind of selective boycott is the right approach.

“In 2005 British based campaign group Friends of Maldives unveiled a carefully targeted boycott of some of the Maldives most popular resorts. Outraged at the torture in Maldivian prisons, the police brutality on the streets and the human rights abuses, the group unveiled its selective boycott to pressure the regime from within. The boycott targets any resort owned wholly or in part by a member of the government, the hope being that the loss of revenue will in turn cause associates of President Gayoom to put pressure on him to an end human rights abuses, hold free and far elections and rein in the police and National Security Services…

We support this cleverly targeted campaign and suggest you do too; it fully supports tourism in the Maldives conscious that it’s the country's only major industry, but it tells adherents to avoid about one fifth of the resorts which bring ministers and other senior government figures significant revenue each year….

Chart of the Day- Deaths of poor in rich neighborhoods


“By living in a well-to-do neighborhood, poor people increase their risk of death, according to a new study by School of Medicine researchers to be published in the December issue of the American Journal of Public Health.”
- Death rates for poor higher in rich neighborhoods

Via Columbia Sat Blog and Michael Stastny

Carnival of Podcasts

The Peasants' Revolt
But who were the rebels and how close did they really come to upending the status quo? And just how exaggerated are claims that the Peasants’ Revolt laid the foundations of the long-standing English tradition of radical egalitarianism?

A bit more of British history podcasts via Brad DeLong. See also British History blog.

Saddam: Personal Insights

In this four-part Heritage series Malcolm Billings explores the archaeology of patriotism in the USA; Part One, Part Two.

Air Taxi!
Recently the market for air taxis has really taken off but can this expensive form of personal transport really fly?

What exactly were Crusades and how useful are they as a metaphor in the twenty first century?

Interview with John Emsley
If you are really keen to murder a spouse, which chemical element would you choose? Arsenic is SO last year. Mercury is so - well, mercurial. Cambridge chemist John Emsley offers informed advice for anyone contemplating homicide who would like to show a little flair and impress the team from CSI.

Flat Tax Reform in Slovakia: Lessons for the United States

$7100, $6100, and $4550 for a PS3

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Will these incredible prices actually be paid?

The Economist of the Century

Sloppy writing reflets sloppy thinking”- Milton Friedman

Milton Friedman has died.

Condolences to his family- his son David Friedman comments about some of the less well-known contributions of the great economist.

“My first post to this blog, at:

described the superiority of the Chicago style workshop, where the participants are expected to read the paper in advance and the presenter to talk about it for not very long, rather than presenting it, over the more conventional approach. As best I can tell the Chicago style workshop was an invention of my father's.

Long ago I happened to be doing some statistical work, and discovered that my father had a statistical test named after him, a way of doing statistics on ordinal rather than cardinal values—just what, in that project, I needed.

I gather that he was in part responsible for a much more important statistical breakthrough, the idea of using the results of the first N tests to decide whether to do test N+1, instead of selecting the number of tests in advance.”

A comment at Freakonomics blog put it nicely one of the things that I liked about him most;

“What I enjoyed most about him was his ability to frame his arguments objectively as opposed to slinging mud and attacking the character of his opponents in the name of ‘debate.’ To paraphrase Thomas Sowell, it was enough for Friedman to state that his opponents were mistaken and their policies harmful—and why.

His genius was that he was capable of thinking far beyond anyone else yet he was equally capable of explaining economic concepts and ideas in a manner than most any layman could understand. “Free to Choose” lit a fire of interest in economics for me, and had I not read it I doubt I would have returned to college to pursue an econ degree.”

Obituaries; CATO, NYT, Financial Times, Chicago Tribune, WSG, More at Google News.

Across the blogs; Danish blog, Mahalanobis, Catallaxy, Businomics, The Club for Growth, Jane Galt, Instapundit, Reason blog, Economist’s View, Greg Mankiw, RGE, Robert Lawson, William Polley, Arnold Kling

The unwritten rules of proxemics

A fascinating article in NYT talks about role of personal space and its implications;

“Communications scholars began studying personal space and people’s perception of it decades ago, in a field known as proxemics. But with the population in the United States climbing above 300 million, urban corridors becoming denser and people with wealth searching for new ways to separate themselves from the masses, interest in the issue of personal space — that invisible force field around your body — is intensifying….

But whether people have become more protective of their personal space is difficult to say. Studies show people tend to adapt, even in cities, which are likely to grow ever more crowded based on population projections.

Yet studies involving airlines show the desire to have some space to oneself is among the top passenger requests. In a survey in April from TripAdvisor, a travel Web site, travelers said that if they had to pay for certain amenities, they would rather have larger seats and more legroom than massages and premium food. And a current advertisement for Eos Airlines, which flies between New York and London, is promoting the fact that it offers passengers “21 square feet of personal space.”

While people may crave space, they rarely realize how entrenched proxemics are. Scholars can predict which areas of an elevator are likely to fill up first and which urinal a man will choose. They know people will stare at the lighted floor numbers in elevators, not one another...

They know commuters will hold newspapers in front of them to read, yes, but also to shield themselves from strangers. And they know college students will unconsciously choose to sit in the same row, if not the same seat, each class.

If you videotape people at a library table, it’s very clear what seat somebody will take,” Dr. Archer said, adding that one of the corner seats will go first, followed by the chair diagonally opposite because that is farthest away. “If you break those rules, it’s fascinating,” he said. “People will pile up books as if to make a wall — glare.”

Daniel and Gnarls

I'd like to announce two new contributors -- well, one nearly new and one very new.

First, Daniel Goodman returns, now pursuing a Masters degree in the economics program at Vanderbilt, after studying economics at GMU as an undergraduate.

Second, the pseudonymous Narl S. Barkleigh promises to bring some hard-boiled thrashing to T&B's usually calm and polite pages. You can call him Gnarls.

Madness in Bollywood Movies

madtalesbollywood.jpgSeems like an interesting study;

“OBJECTIVE: To study the portrayal of mental illness (especially psychosis) in Hindi films since 1950 and to study the influence of prevalent social, political and economic factors on each portrayal. METHOD: Using two encyclopedias and one source book, films that had mental illness affecting one of the protagonists were identified. The social, economic and political factors were identified using history texts. RESULTS: In the 1960s after India became a Republic, the political climate was one of idealism and as a result the portrayal of mental illness was gentle, more international in its outlook, and used psychoanalytic techniques. In the 1970s and 1980s, as a result of increased political and bureaucratic corruption and an unstable political climate, the portrayals became harder and psychopaths were portrayed more often. In the 1980s, the trend continued with female psychopaths, and avenging women emerged as a major force because the political and judicial systems were seen as impotent in delivering justice. In the 1990s, following economic liberalization, the women were seen and used as possessions in society and the cinema, and portrayals of stalking and morbid jealousy increased. CONCLUSION: Hindi films since the 1950s appear to have been influenced by changing cultural norms which in turn affected the way mental illness is portrayed.”

Via Mind Hacks; Lights, camera, madness - Bollywood style

A pat on the back for `Lage Raho Munnabhai'
Insanity in films
Indian author and film-maker Ruchir Joshi interview

Podcast of the Day- May the Force Be With You

“The New Rules of the Game is a three part in depth look at globalisation what it means and how it has developed. BBC diplomatic correspondent Jonathan Marcus will take us to Europe, the United States, the Balkans, and China, where he investigates globalisation as a force for both good and evil.

In program one, May the Force Be With You, Jonathan Marcus travels to China and the United States to explore the sinews that bind the new globalised world together. He examines what is meant by globalisation; where did it come from and how has it evolved? What is the relationship between technological change and globalisation? Is it really, as its advocates suggest, a force for good? We hear from one of globalisation's greatest advocates Tom Friedman and from one of its fiercest early critics Robert Kaplan.”

Listen to the podcast.

Afghanistan Drug Control- GAO’s views

A recent report from GAO; Afghanistan Drug Control: Despite Improved Efforts, Deteriorating Security Threatens Success of U.S. Goals

“The prevalence of opium poppy cultivation and drug trafficking in Afghanistan imperils the stability of its government and threatens to turn the conflict-ridden nation once again into a safe haven for traffickers and terrorists. To combat the drug trade, the U.S. government developed a counternarcotics strategy consisting of five pillars--alternative livelihoods, elimination and eradication, interdiction, law enforcement and justice, and public information. The Emergency Supplemental Appropriations Act of 2005 directed GAO to examine the use of all fiscal year 2005 funds administered by the U.S. Agency for International Development (USAID) and Department of State (State) for Afghan counternarcotics programs. To comply with this mandate, we examined progress under each counternarcotics pillar, challenges faced, and efforts to ensure that funds were used for intended purposes. To address these objectives, GAO reviewed pertinent USAID and State documents and met with cognizant U.S. and international officials in Washington, D.C., and Afghanistan. GAO makes no recommendations in this report. USAID, State, Department of Defense, and Department of Justice were provided a draft of this report, but did not provide formal comments.”

Iraq reconstruction fact of the day


“Meanwhile, multiple audits conducted by U.S. and other agencies point to waste and malfeasance involving funds slated for reconstruction. The most recent, conducted by a UN oversight agency, found that the Halliburton subsidiary KBR had charged the Iraqi government $25,000 per truck per month for 1,800 fuel trucks that, it turns out, sat largely unused (PDF) along the Iraqi border…

All told, U.S. taxpayers have spent some $38 billion to rebuild Iraq—though much of the country’s infrastructure remains at prewar levels and many Iraqis still lack adequate water, electricity, and heating oil.”

- Tracking U.S. Dollars to Iraq

The funniest (and sad) headline I read today

Police releases would be demonstrators;

"The Maldives Police Service has released the passengers of two dhonis who were en route to Male to participate in the November 10th demonstrations. The Police had intercepted the boats as they were arriving to Male and had detained the passengers. The demonstrations were organised by Maldives Democratic Party to force the People’s Special Majlis to amend the constitution."

Podcast of the Day- Political Economy of Bad Regulation

Russ Roberts talks with Sam Peltzman at Econ Talk.

Listen to the podcast.

Also have a look at a selection of articles by Tim Harford and Jamie Whyte, a freelance writer published in The Times (London), this year’s Bastiat Prize winners and other finalists.

The Chile Story

The secret behind Chile’s macro-economic stability and robust growth over the past 20 years.

- Strong fiscal discipline. Over the last two decades, only in Chile were years of fiscal deficits roughly offset by years of surpluses; most other Latin American countries displayed a bias toward deficits. Fiscal discipline was reinforced by the introduction of the structural surplus rule in 2000. The reward has been a vastly lower debt-servicing burden, as fiscal discipline resulted not only in lower government debt but also in lower real interest rates.

-A credible inflation targeting framework has helped anchor inflation expectations at a low level. Under this framework, the central bank aims at keeping inflation within a 2–4 percent target range. In recent years, the central bank has also let the peso float freely.

-The financial system was strengthened and capital markets deepened. Financial liberalization was a mainstay of policy reform in Latin American in the 1990s, mainly focusing on deregulation and privatization. Chile took strong actions to strike the right balance of market discipline and sound banking supervision, while its capital market rapidly deepened.

- Trade integration, in conjunction with a broad financial opening, was significant. Chile’s export sector, one of the most open and diversified in Latin America, has proven an important buffer against current account shocks, while also boosting Chile’s growth potential.

- Institutional arrangements were set to create a more certain macroeconomic environment. Sound economic policies and reforms have been carried out within a stable institutional framework to avoid reversals. These institutional arrangements have helped reduced the incentives problems that have led to a lack of fiscal discipline, complex and distorted trade polices, and moral hazards in the financial system see elsewhere in the region.

Help a young economist from Romania

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Gabriel’s friend is leaving for US and he is asking for some advice on an advanced macroeconomics text book he wants his friend to bring from the states;

“I decided to get Recursive Methods in Economic Dynamics (Stokey, Lucas, Prescott) because, frankly, I need all the help I can get with the math required by most contemporary macro. models. I hope the content is still relevant (I see it’s from ‘89), but even if it’s not 100% up-to-date, I like the authors and I’ll be more than satisfied if I manage to learn everything in there.

Now, for the thornier issue… I can afford another book. And this where you, my loyal audience, come in. Can you suggest a textbook-like volume, which includes as many of the following characteristics as possible?”

Read his entire post.

Podcast of the Day- Ponzi’s Scheme

Ponzi's Scheme: The True Story of a Financial Legend
“Before Charles Ponzi (1882-1949) sailed from Italy to the shores of America in 1903, his father assured him that the streets were really paved with gold and that Ponzi would be able to get a piece. Mitchell Zuckoff, Professor of Journalism at Boston University and former reporter and Pulitzer Prize finalist for the Boston Globe, observes in his engaging and fast-paced biography, Ponzi learned as soon as he disembarked that though the streets were often cobblestone, he could still make a fortune in a culture caught in the throes of the Gilded Age. Learn about Ponzi's mercurial rise and fall as he conjured up one get-rich-quick scheme after another. Zuckoff reveals how the Boston Post uncovered this 'robbing Peter to pay Paul' system (as it was then known), and how Ponzi's life unraveled.”

Quote of the Day- Stocks and flows of economics

“The stock of economic knowledge based on centuries of thinking is great. The flow of new knowledge is meager. Your past coursework was based on the stock. Conferences are based on the flow. So conferences always seem thin cruel compared with well-run courses.”
- Greg Mankiw

Haiti Fact of the Day


Podcast of the Day-The Search for Stability

Ian Macfarlane, former governor of the Reserve Bank of Australia is giving the Boyer Lectures for this year. The focus is macroeconomics titled The Search for Stability.

Listen to the first lecture- The Golden Age
The end of the second world war ushered in an era of incomparable economic growth. In the era of post-war reconstruction the world's developed countries would enjoy a 'golden age' of low inflation and full employment. Guided by the theories of John Maynard Keynes, governments became increasingly confident in how to apply macroeconomic policy. Ian Macfarlane examines why this prolonged stability led some to proclaim that business cycles and recessions were things of the past. By the early 1970s it was clear such optimism was misplaced.

Here is the transcript.

Google’s next product- Google Medicine?

Would Google replace doctors?

“Doctors facing a patient with unusual symptoms could well be advised to use Google to try to pinpoint the cause, a study published by the British Medical Journal (BMJ) suggests.

Australian doctors were given 26 real-life cases of individuals who had fallen sick with relatively rare disorders.

They were not told what diagnoses had been given in these case reports but did a Google search based on the symptoms that were presented.

Google returned the right diagnosis in 15 out of the 26 cases – an accuracy rate of 58 per cent.”

Perspectives on “Dark Matter”

Interesting paper-Statistical Issues Related to Global Economic Imbalances: Perspectives on “Dark Matter”;

“There has been a large amount of recent interest in how the U.S. can be the so-called world's largest debtor nation and at the same time have a persistent surplus on income in its balance of payments accounts. Based on BEA's published data, two factors explain the incongruence -- a difference in the composition of U.S.-owned assets abroad compared to foreign-owned assets in the U.S., and a higher rate of return earned by U.S. investors on their overseas assets, particularly on direct investment, than the rate of return that foreign investors earn on similar classes of assets invested in the U.S. In contrast, some others have recently argued that the explanation for the incongruence is that U.S.-owned assets abroad are undervalued, mainly because large exports of intangible assets by U.S. direct investors to their foreign affiliates have gone undetected. This paper reviews the main points of this argument and discusses some of its implications.”

For more on the issue see Econbrowser

Five Rules for telling a Joke

- Pick your moments. It's easiest to tell a joke when everyone's relaxed and enjoying themselves. Telling a joke to relieve tension is a high-risk strategy, but potentially hilarious. Besides, there'll be other funerals.

- Know where you're going - the punchline - before you start

- Don't be tempted to over-elaborate. Eddie Izzard makes it look easy, but remember that one man's surreal flight of fancy is another man's rambling, incoherent humiliation.

- Project a demeanour of relaxed confidence - it gives your listener permission to laugh. You can try deadpan, but social joke-telling usually requires the teller to laugh too.

- Enjoy it. If your entire self-esteem is resting on whether people laugh at your joke, then you're doing it for the wrong reasons. On the other hand, you are showing signs of the borderline personality disorder that characterises all the best comedians, so perhaps you should consider telling jokes for a living.

Via Mind Hacks- How to be funny

Is this the perfect comedy face?

The Naked Jape: Uncovering the Hidden World of Jokes by Jimmy Carr, Lucy Greeves

An Arab role model

Profile of a role model for Arab women;

Every day and night, I think about how the girls need to change,” Sheika Lubna said emphatically. “Ultimately, I am out there for them.”…

As a woman who challenged all the societal rules in the 1970s, working her way up the ranks as a computer engineer, then a chief executive and a government minister, she has sought to prove to women here that they, too, must begin assuming a greater role in public life.
Her family is the ruling family of the emirate of Sharjah, the emirate neighboring Dubai; her uncle is the ruler. As royalty, she faced even more traditional demands than most. Moreover, she never really needed to work, and if she chose to, she could have opted for a low-key job in a ceremonial role or as a bureaucrat.

She chose the hard way, however. When other women were staying home in the late 1970s, Sheika Lubna left for California to study computer engineering, becoming one of the first Emirati women to travel abroad for study.

But Arab religious sheikhs seem interested in explaining other things.

Macaca Op-Ed

S.R. Sidarth has an op-ed in Washington Post;

“After Allen's remarks, my heritage suddenly became a matter of widespread interest. I am proud to be a second-generation Indian American and a practicing Hindu. My parents were born and raised in India and immigrated here more than 25 years ago; I have known no home other than Northern Virginia. The hairstyle inflicted upon me by two friends late one night also became newsworthy; for the record, it was intended to be a mullet and has since grown out to nearly the appropriate length.

The larger question that this experience brings up is: How far has society progressed on the issues of race and openness? By 2050, according to most projections, the United States will be a minority-majority nation. But the fact that Allen believed I was an immigrant, when in fact I am a native Virginian, underlines the problems our society still faces.”

“There are 1.7 million Americans of Indian ancestry. They are the fastest growing ethnic group in this country. Their income is 54% higher than the national average, and 1 in 9 is a millionaire.”
-Foreign Exchange show

How Egypt implemented a flat tax


"Since 2005 all businesses have paid a 20% corporate income tax – rather than 32% or
40%, depending on the sector. All sector-, location- or business-specific tax holidays and exemptions were eliminated, about 3,000 in all. Businesses can file and pay taxes electronically. As a result two million Egyptians filed taxes in 2005, double the number in 2004."

- Paying Taxes- The Global Picture

Cost-Benefit of Sex


The benefits of sex according to this article;

“In one of the most credible studies correlating overall health with sexual frequency, Queens University in Belfast tracked the mortality of about 1,000 middle-aged men over the course of a decade. The study was designed to compare persons of comparable circumstances, age and health. Its findings, published in 1997 in the British Medical Journal, were that men who reported the highest frequency of orgasm enjoyed a death rate half that of the laggards. Other studies (some rigorous, some less so) purport to show that having sex even a few times a week has an associative or causal relationship with the following:

- Improved sense of smell:….
- Reduced risk of heart disease: …
- Weight loss, overall fitness: Sex, if nothing else, is exercise. A vigorous bout burns some 200 calories--about the same as running 15 minutes on a treadmill or playing a spirited game of squash. The pulse rate, in a person aroused, rises from about 70 beats per minute to 150, the same as that of an athlete putting forth maximum effort. British researchers have determined that the equivalent of six Big Macs can be worked off by having sex three times a week for a year. Muscular contractions during intercourse work the pelvis, thighs, buttocks, arms, neck and thorax. Sex also boosts production of testosterone, which leads to stronger bones and muscles. Men's Health magazine has gone so far as to call the bed the single greatest piece of exercise equipment ever invented.

Known Known

Slate recycles the poetry of Rumsfeld;

The Unknown
As we know,
There are known knowns.
There are things we know we know.
We also know
There are known unknowns.
That is to say
We know there are some things
We do not know.
But there are also unknown unknowns,
The ones we don't know
We don't know.

—Feb. 12, 2002, Department of Defense news briefing

The Situation
Things will not be necessarily continuous.
The fact that they are something other than perfectly continuous
Ought not to be characterized as a pause.
There will be some things that people will see.
There will be some things that people won't see.
And life goes on.

—Oct. 12, 2001, Department of Defense news briefing

Google and Known Unknowns

Private schooling in Pakistan

A recent working paper from the World Bank;

A dime a day : the possibilities and limits of private schooling in Pakistan- This paper looks at the private schooling sector in Pakistan, a country that is seriously behind schedule in achieving the Millennium Development Goals. Using new data, the authors document the phenomenal rise of the private sector in Pakistan and show that an increasing segment of children enrolled in private schools are from rural areas and from middle-class and poorer families. The key element in their rise is their low fees-the average fee of a rural private school in Pakistan is less than a dime a day (Rs.6). They hire predominantly local, female, and moderately educated teachers who have limited alternative opportunities outside the village. Hiring these teachers at low cost allows the savings to be passed on to parents through low fees. This mechanism-the need to hire teachers with a certain demographic profile so that salary costs are minimized-defines the possibility of private schools: where they arise, fees are low. It also defines their limits. Private schools are horizontally constrained in that they arise in villages where there is a pool of secondary educated women. They are also vertically constrained in that they are unlikely to cater to the secondary levels in rural areas, at least until there is an increase in the supply of potential teachers with the required skills and educational levels.

Micro health insurance

An interesting article on health financing among the poor in India;

“India is a world leader in this emerging field, with 5 to 10 million people enrolled in micro health insurance nationwide. Fewer than 10 percent of India's 1.1 billion people have any sort of health insurance, much of which covers only government employees. Poor people usually work in informal jobs or are self-employed, so they are extremely unlikely to be included in employment-related plans.

Consequently, health financing poses an acute problem for India. About one-fourth of hospitalized Indians fall below the poverty line as a direct result of their hospital expenses, according to a 2002 World Bank report. Many people take out steep loans or sell their homes in order to pay. And for the poor, losing even a day's wages while waiting in the hospital can be devastating.”

Economists and Integrity

Two economists who recently lost part of their titles;

Andrei Shleifer ’82 isn’t the only Harvard economics professor to have been stripped of his endowed title after allegedly getting his hands dirty.

Martin L. Weitzman, the Harvard faculty member accused of stealing horse manure from a Rockport, Mass., farm in April 2005, has also recently lost his title as the Ernest E. Monrad Professor of Economics.

David Warsh has an interesting column on the issue. He concludes;

“There is, indeed, a common thread running through both incidents: a rather startling arrogance; in each case a Harvard professor acted as though he were entitled to take whatever he wanted, regardless of the law. Granted, there is not much moral equivalence between a $900 quarrel in a small town, on the one hand, and, on the other, an unrepentant betrayal of an adoptive country, an alma mater, hundreds of employees and a raft of friends (which also cost Harvard well over $30 million and much reputational capital). Applying the same penalty to the perpetrator of a misdemeanor as to a man who smuggled Soviet-style values into the highest levels of government and education in the United States might seem to send no more weighty a message to the Harvard faculty than, Don't get our name in the newspapers by breaking the law. But perhaps it is too early to say.

Small gestures, cunningly contrived, can have big effects. The price of not doing the right thing is going up as well.”

What is Harvard teaching its students? Mankiw, please explain?


Some people will never learn anything because they understand everything too soon
- Alexander Pope

Alexander Pope
So how did Pope manage to transform himself from a crippled outsider into a major cultural and moral authority? How did he shape our ideas about what a “modern author” is? Does his work still have resonances today or is it too firmly embedded in the politics, cultural life and rivalries of the period?

The Baghdad Billions- Part 1 (The first year of reconstruction) and Part 2 (Failure of the US aid programme)

Gun control - a new study has found the 1996 gun buy-back had no effect on firearm deaths.

Whistleblowers and the law

Do we have to die?

The Science Show versus God
This week Richard Dawkins' remarkable book The God Delusion is released in Australia. Dawkins, Professor of the Public Understanding of Science at Oxford says he hopes that reading his book will make believers doubt their faith. He explains why he is so convinced, through the weight of scientific evidence, that atheism is the more valid viewpoint. Two winners of the Templeton Prize, given for building bridges between spiritual values and science, Professors John Barrow from Cambridge and Paul Davies now in Arizona give alternative views

Stem Cell Research
The history of the science of stem cell research - what are stem cells and when and how were they discovered.

The curse of the Western world: a history of obesity

North Korea
On Rear Vision this week a look at the history of North Korea and in particular the history of the relationship between North Korea and the United States of America

Harry Messel
One of Australia's most famous physicists tells of a childhood in Canada where he excelled at school, did two degrees simultaneously at university, and came to live in Australia. His pioneering work here has to be heard to be believed.

High blood pressure medication
A recent Australian study looked at medication for high blood pressure and the implications of patients' adherence or non-adherence to their doctor's prescription of these types of drugs

Jane Goodall
Jane Goodall talks about her 40 years of work with chimpanzees in Tanzania, and the relationship between chimpanzee behaviour and human behaviour.

Home Fronts: Indonesia
Terry Lane examines the political influence of Islamist values, the impact of radical organisations on Indonesian society and the democratisation of Indonesian institutions, in the fifth program of this six part series

Tobacco and Culture: First Nation Peoples face the Challenge
Sucking on cigarettes. It's a public health nightmare for the world's indigenous peoples. Maori women have the word's highest rates of lung cancer. Smoking rates haven't dropped in 15 years amongst Aboriginal Australians. But, for Native Americans native tobacco still has sacred, ceremonial value.

He became known as the Luther of Medicine for his reformist medical practices, but Paracelsus, who was born in Switzerland in 1493, was also a religious man. His belief that the body was actually empowered by God had implications for his theories of healing.

Lessons to Autocrats

If you’ve free assembly, the probability that a leader will be in his or here position a year later- they’re not a democracy- the probability decreases by 86 percent if they make the mistake of allowing people to assemble. Of course they don’t make this mistake….

These guys have figured out, if I let these folks get together, if I let them be well-informed, if I let them know what the government is doing, I’m going to be in trouble. I can make them better off economically and so forth without doing that, and I can by that mechanism postpone the risk that I’m going to be kicked out.”

-Bruce Bueno de Mesquita, in this podcast interview.

How many civilians have died in Iraq?

According to Iraqi government official;

"Iraqi Health Minister Ali al-Shemari estimated Thursday that 150,000 Iraqi civilians have died in the war as he spoke to reporters in Vienna. He later said he based the figure on an estimate of 100 bodies per day brought to morgues and hospitals--though such a calculation would come out closer to 130,000. However, the head of Baghdad's central morgue said his facility alone was receiving about 60 bodies a day as a result of violence."

Good News for Bush- from The Economist blog- also have a look at their spreadsheet
On Whose Authority
Can we accept Lancet’s result without accepting their number
The cost of Chaos
Drowning by Numbers
Estimating Iraq deaths using survey sampling

Who Killed Iraq?

BBC reports on the missing billions from Iraq;

"In hearings on Capitol Hill in Washington, Democratic congressman Henry Waxman has emerged as the most vocal critic of the US' record on reconstruction.

In particular, Mr Waxman says proper accounting procedures were ignored when large sums of Iraqi cash were handed over by the Coalition Provisional Authority (CPA) - the US-led body that ran Iraq immediately after the war - to get Iraqi ministries functioning again.

"I think we're looking at a huge scandal. The CPA handed over $8.8bn in cash to the Iraqi government even though that new government had no security or accounting system.

"No one can account for it. We don't know who got that money," Mr Waxman said.

Stuart Bowen is the special inspector general for Iraq reconstruction. His task is to follow the paper trail - and after more than 100 investigations his work paints a grim picture of waste and mismanagement.

Mr Bowen said billions of dollars were shrink-wrapped in plastic and flown out of the US to Baghdad.

"It was $2bn a flight, and I know of at least six flights," he said.

Mr Bowen said some of the cash went to pay the salaries of thousands of "ghost employees", or Iraqi civil servants who did not actually exist.

Not all breast-feeding is equal

Is breast-feeding worth it;

“Let’s be honest: if the only adverse consequence of not nursing is that babies get a few more colds, we could leave the decision making to the parents. The real question is whether there are dangerous or potentially long-term damaging illnesses (such as ear infections that lead to hearing loss) for babies who aren’t nursed versus babies who are. And how long (or how much) should a baby be nursed in order to keep his or her risk down?

One of the big problems in trying to assess this question is that not all nursing is equal. There are mothers who nurse exclusively, mothers who use expressed breast milk (delivered in bottles), mothers who freeze milk, or use pasteurized (donated) milk, or use some breast milk and some formula, and a combination of all of the above.

Then there are the babies, some of whom are premature, or have low birth weight, or have other health issues that could make nursing harder; there are some babies who are nursed until they are four-years old, and others who nurse until they are six-weeks old.

Finally, we must add a complicating factor that it’s virtually impossible to carry out the gold standard of research on this issue – a randomized controlled study in which mothers are randomly assigned whether to nurse or not. Our observational power may also be limited; at least in principle, because women (and families) who nurse are not the same as those who don’t, making any comparison of the outcomes extremely difficult.”

For a lay person’s guide to how economists think about such issues read, Trade-Offs: An Introduction to Economic Reasoning and Social Issues by Harold Winter.

Here’s a review of the book at Newmark’s Door.

Why it’s better to be a Women

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Thirty reasons why it’s better to be a women. On top is that they got off the Titanic first. Would it be the case today, I wonder? Read the following piece by Fareed Zakaria;

“Of the many differences between the movie "Titanic" and history, one in particular is telling. In the movie, as the ship is sinking the first-class passengers (all third-class human beings) scramble to climb into the small number of life-boats. Only the determination of the hardy seamen -- who use guns to keep the grasping men at bay -- gets the women and children into the boats.

In fact, according to survivors' accounts, the "women and children first" convention was observed with almost no dissension, particularly among the upper classes. The statistics make this plain. In first class, every child was saved, as were all but five (of 144) women, three of whom chose to die with their husbands. By contrast, 70 percent of the men perished. In second class, 80 percent of the women were saved but 90 percent of the men drowned.

The men on the first-class list of the Titanic virtually made up the Forbes 400 of the time. John Jacob Astor, reputedly the richest man of his day, is said to have fought his way to a boat, put his wife in it and then stepped back and waved her goodbye. Benjamin Guggenheim similarly refused to take a seat, saying: "Tell my wife . . . I played the game out straight and to the end. No woman shall be left aboard this ship because Ben Guggenheim was a coward." In other words, some of the most powerful men in the world adhered to an unwritten code of honor -- even though it meant certain death for them. The movie makers altered the story for good reason: no one would believe it today.”

Politicians do what they do to stay in office

Lessons from the recent elections in the US;

“About $2.6 billion was spent on the 468 House and Senate races. (Scandalized? Don't be. Americans spend that much on chocolate every two months .) Although Republicans had more money, its effectiveness was blunted because Democrats at last practiced what they incessantly preach to others -- diversity. Diversity of thought, no less: Some of their winners even respect the Second Amendment.

Free markets, including political markets, equilibrate, producing supplies to meet demands. The Democratic Party, a slow learner but educable, has dropped the subject of gun control and welcomed candidates opposed to parts or even all of the abortion rights agenda. This vindicates the candidate recruitment by Rep. Rahm Emanuel and Sen. Chuck Schumer, chairmen of the Democratic House and Senate campaign committees, respectively. Karl Rove fancies himself a second iteration of Mark Hanna, architect of the Republican ascendancy secured by William McKinley's 1896 election. In Emanuel, Democrats may have found another Jim Farley, the political mechanic who kept FDR's potentially discordant coalition running smoothly through the 1930s.”

Via Russell Roberts

The dynamics are different when it’s not a democracy- still opposition leaders need to work on building coalitions of willing among moderate and reasonable segments of the society if one wants to build a sustainable democracy.

Winner of Who Wants to Be A Millionaire?, Ogi Ogas explains how he used techniques of congintive neuroscience to win the quiz the show;

"I used priming on my $16,000 question: "This past spring, which country first published inflammatory cartoons of the prophet Mohammed?" I did not know the answer. But I did know I had a long conversation with my friend Gena about the cartoons. So I chatted with Meredith about Gena. I tried to remember where we discussed the cartoons and the way Gena flutters his hands. As I pictured how he rolls his eyes to express disdain, Gena's remark popped into my mind: "What else would you expect from Denmark?" …

Another cognitive process essential for winning on Millionaire is intuition, or more precisely, knowing how to make decisions based on intuition. What if you have a feeling about an answer? What should you do with your hunch? Folk wisdom holds that on standardized tests you should go with your first impulse. Research tends to support this idea: a first impulse is more often correct than a second, revised decision. But what if $250,000 is at stake? "More often correct" does not seem certain enough to serve as a basis for a decision. How can you evaluate the true likelihood of a hunch being accurate?...

Dewita Soeharjono, Northern Virginia real estate blogger, holds to the professional line: a vote for the marriage amendment is a vote against business:

It challenges the validity of any contracts between non-spousal, for example in case of buying a home, contracts between sisters, parents and children etc....

So, vote "NO" to Virginia proposed constitutional marriage amendment (Ballot Question Number 1).

UPDATE: By a count of 1,321,177 to 999,854, the voters of Virginia have passed the VMA. Voting no were the majorities of only two of eleven districts, the 3rd (Richmond, Newport News, and Portsmouth) and 8th (immediate DC suburbs).

A Nation Crying for Freedom

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Crackdown in Maldives ahead of planned protest rally;
Ms Latheef said the government was taking advantage of the fact that there are few international observers on the islands. "The government is intimidating the public by saying the US military ship in Maldives for a training session is there to actually help the government in handling the demonstrators ... there is no respect for rule of law by the government and they have the power to do what they please."

Alcohol and a New Muslim Nation

Alcohol found aboard barge near Kumundhoo

I imagine that most Maldivans won't think it odd that the discovery of contraband alcohol [al-kuhl , something like "the distilled essence" in Arabic] is big news. After all, the Maldives currently forbids alcohol possession and consumption -- except for foreigners on the resort islands -- on the grounds that the Maldives is an Islamic nation, and citizens by law are Sunni Muslims.

Danish Flexicurity Model

Latest IMF Survey summarizes the features of the Danish Flexicurity model of its labour market - a uniquely Danish blend of a flexible labour market, generous social security and an active labour-market policies;

Labor market flexibility. Measured by how restrictive employment protection legislation is, the Danish labor market is more flexible than that in many other European countries. In practice, this means that Danish employers, both in the public and private sectors, can lay off workers rather easily. This is not a novel aspect of the Danish social system— protection against dismissal has historically been low, a feature that has been linked to the country’s openness and its many small and medium-sized enterprises.

An extensive social safety net. Danes enjoy a high level of social protection, including generous unemployment benefits. The average net replacement rate (what people receive from the state when they lose their jobs, calculated as a percentage of their salary) is about 80 percent, among the highest in Europe.

Active labor market policies. A large variety of labor market programs facilitate and encourage reintegration of the unemployed into the labor market. But these programs are expensive. As a result, Denmark is at the top in terms of its per capita spending on labor market programs.

A long term truce between Palestine and Israel?

Ahmed Yousef, a senior adviser for Hamas has an op-ed in NYT;

“A truce is referred to in Arabic as a “hudna.” Typically covering 10 years, a hudna is recognized in Islamic jurisprudence as a legitimate and binding contract. A hudna extends beyond the Western concept of a cease-fire and obliges the parties to use the period to seek a permanent, nonviolent resolution to their differences. The Koran finds great merit in such efforts at promoting understanding among different people. Whereas war dehumanizes the enemy and makes it easier to kill, a hudna affords the opportunity to humanize one’s opponents and understand their position with the goal of resolving the intertribal or international dispute.”

The most important thing Edmund Phelps learned?

An interview with Edmund Phelps;

"The most important thing I've learned about how markets work or how economies work? …Offhand I can't think of the most important thing that I've learned. Maybe it is that when I was starting out in the subject I had little sense of the uncertainty under which the economic actors in the economy have to operate. I was very much under the influence of textbook models that I'd been studying in college and in graduate school, and it's only very, very slowly over decades and decades that my conception of what a healthy market economy is all about has developed. So I think maybe that's the biggest thing I've learned, is that the future is highly uncertain, the start-up entrepreneurs and even the CEOs and the established companies are aware of the uncertainties, financiers are aware of these uncertainties, everybody acts accordingly, and that makes the economy quite different from the way it is still described in the textbooks."

Listen to the podcast.

How Long Does it Take to Write a Constitution?

The People’s Special Majlis of the Maldives has been thrashing around ideas for a new constitution for around two years now -- with nary a written word, except for news releases -- although a lot of talk. The opposition has made a call for supporters to meet up in Male on November 10th. The ruling party has said that it will not meet with the opposition, and claims, as usual, that opposition demonstrators are criminals, etc. There's much more at the opposition-based Minivan News.


But let's give the folks writing up the constitution the benefit of the doubt; maybe it takes a really long time to write up a constitution for a democracy.

Iraq: Indications and Warnings of Civil Conflict


Via NYT.


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