Just when I was thinking the Macroeconomics class was giving the students a onesided view of economy, professor surprised me by playing “Fear the Boom & Bust” by John Papola & Russ Roberts.
Financial Times has interesting article on household wealth and distribution of millionaires in general population in various countries.
Singapore has one of the highest density of millionaires in its population. A country of just 5 million people, Singapore has an astounding 1 million millionaires. The results are not that surprising, most countries at the top of the list would qualify as places that are relatively laissez-faire – including Switzerland, Hong Kong, Qatar(my sister lives here), Kuwait etc. More people are getting to share in the general prosperity. I have been to Singapore a couple of times. It is neat place indeed.
This story also reminds me of what I read recently in Paul Krugman’s book The Return of Depression Economics:
Hong Kong has long had a special place in the hearts of free-market enthusiasts. At a time when most Third World countries believed that protectionism and government planning were the way to develop, Hong Kong had free trade and a policy of letting entrepreneurs rip—and showed that such a wide-open economy could grow at rates development theorists had never imagined possible.
Krugman, Paul (2009). The Return of Depression Economics and the Crisis of 2008 (Kindle Locations 1750-1752). W. W. Norton & Company. Kindle Edition.
Professor Krugman did not mention Singapore in that comment because he was talking about the Asian Currency Crisis of the late 90s – Singapore, probably, did not fit his narrative of the crisis as well as HK did. Krugman was not championing unfettered markets in that book, just the opposite. Yet, it goes to show you, one more time, that there is no proven road to general prosperity like markets that are largely left to it’s own devices in allocating resources.
(HT: Scott Sumner – Prof. Sumner’s comments )
Here the differences are staggering. In every meeting we attended, with four
different customers of our company as well as representatives from four
different arms of the Chinese government, our hosts began their presentation
with a brief discussion of China’s new five-year-plan.
If you don’t believe the China bubble, watch this youtube clip. You will be amazed.
For the last few days, I have been trying out brand new social networking site from Google: Google+. This is a very promising start from Google. The user-interface looks clean and well designed. It is easy to friend people by adding them to one of the circles. A circle is a category – like a family, friend, colleague etc. You can create circles with your naming schemes. A circle is exactly what makes Google+ stand apart from the closest thing to it in the social networking world – Facebook. You can watch the feeds from different circles one at a time or all of them together. You can also choose to share updates/photos/videos with only one or few of the circles.
One thing I did not like immediately is Google+’s integration of Picasa photos into Plus with viewing rights granted to all my circles. I did not know that everyone had viewing rights until one of them asked me if I managed to load so many photos within minutes of opening my plus account. Nevertheless, I like the idea of being able to share the photos with only some of the circles. I also like the fact that it is easy to drag and drop friends photos etc. Like I said earlier, the UI is smooth, clean, and modern.
On the flip side, I am a sophisticated technology user who can find his way around the web, but I have to wonder whether a novice user of technology will find the idea of circles too hard to use.
I will not go as far as to say that Google+ is a Facebook killer. I do not think there is anything radically differentiating about Google+ that is impossible for Facebook to respond to quickly. The concept of putting your friends into groups/buckets is not that hard to build on the Facebook platform. There have been numerous examples in the past, including the most recent “super awesome” video chat. Other such features, to refresh your memory, include features like status updates (Twitter), places & checkins (Foursquare), deals (Groupon), video chat (Google). Facebook’s cozy relationship with Microsoft will help them acquire any features that require major back infrastructure development without having to go through the pain of starting from scratch.
Good news is, this will keep Facebook on its toes, will force them not to rest on their past laurels. I don’t see any reason why Google+ gives everyone a big reason to switch to a platform when their roots are, probably, running deep into the fertile soil of Facebook. It will be an interesting battle to watch.
Macroeconomics professor mentioned in class last night that Keynesians do not want a big government – they just want government to manage demand in the short run through fiscal policy. Is this really true? Is the ideal size of government in the long run the same for Keynesians and Libertarians? Not even close. Not to me. Keynesians, in general, support a lot more goverment programs in education, “welfare”, warfare, and foreign aid than would libertarians.
Professor also admitted that it might be politically difficult to scale back the expansion of government once the shortfall in demand is cured, and any such permanent growth in government is not a fault of the Keynesian prescription for short term fluctuations. This is one of the many reasons why Libertarians and fiscal conservatives oppose hydraulic Keynesianism. It does not matter what the intentions are, results are different – in this case in terms of the size of the government.
At this point, I brought up Keynes’s remarks in The General Theory about socialization of investment. Here are the exact remarks:
“I conceive, therefore, that a somewhat comprehensive socialization of investment will prove the only means of securing an approximation to full employment; though this need not exclude all manner of compromises and of devices by which public authority will co-operate with private initiative. ”
Keynes, John Maynard (2010). The General Theory of Employment, Interest and Money (Kindle Locations 9146-9148). Signalman Publishing. Kindle Edition.
Anyone who keeps an open mind on these issues should read and respond to the attacks from their ideological opponents. This is one thing I have heard the opponents of Keynesianism argue more than once. So I was really surprised to hear her immediate reply. The professor told me that she had not heard about this at all – that Keynes would argue in favor of socialism. She also told me that she has not read The General Theory in almost 30 years. Fair enough. I was asked to send her the details of that remark, and I did, after the class. She was not sure what it really meant. She told me that Keynesianism is not the same thing as Keynes. Fair enough. But, to me, that answer remains unsatisfactory.
Implications of that statement are clear to me – a permanently large government that dictates investment in the entire economy. Nevertheless, I want to interpret this in the most charitable way possible. I leave the door open to the possibility that there is something that I do not understand. I am interested in what Keynes possibly meant by that statement back then.
“A young Ayn Rand once said I am the “one whom I admire as the greatest representative of a philosophy to which I want to dedicate my whole life.”
During the first half of the twentieth century, I was the most outspoken defender of liberty in America. I spent thousands of dollars challenging restrictions on freedom of the press. I boldly denounced President Woodrow Wilson for whipping up patriotic fervor to enter World War I, which cost me my job as a newspaper columnist.
I denounced Franklin Delano Roosevelt for amassing dangerous political power and for maneuvering to enter World War II, and again lost my newspaper job. Moreover, the President ridiculed me by name.
The government I live under has been my enemy all my active life, When it has not been engaged in silencing me it has been engaged in robbing me. So far as I can recall I have never had any contact with it that was not an outrage on my dignity and an attack on my security.”
An interesting thing happened earlier tonight in the macroeconomics class. The topic of the moment was stickiness of prices, especially wages. Professor mentioned that employment contracts are long term and the wages don’t fall quickly enough for markets to clear.
Now, let me tell you, these are MBA students with very little, if any, background in economics. Most of them lean left, as far as I know. I am the only libertarian in the class. If there is a conservative, I do not know who that is. We are talking Silicon Valley here, folks.
I earnestly asked a question to the professor – as to why the employers prefer to cut headcount rather than wages! Granted, there is always a 3-5% of the bottom of the employee pool which is not productive to justify their place in the company, and employers often see a decline in sales/profits as an opportunity to trim away that fat. Who could blame them? However, even when the proposed layoffs are 10, 15 or 20%, employers very rarely use pay cuts as opposed to head count cuts. I really do not know why, hence I asked the question mentioned above. Before waiting for answer, I took liberty to claim in front of the whole class that if the students were the employees of a company in distress, and if they were asked whether they prefer a 10% drop in head count or a 10% across the board pay cut, most would opt for the 10% pay cut. I suddenly heard the professor, and, also, a bunch of students disagree with me, politely. They all claimed that people would opt for 10% cut in head count. I reminded them that the people who choose to put 10% of the heads on the chopping block will not know if one the head is going to be theirs.
Why is this interesting? The professor, from time to time, says that some of the (Keynesian) policies are necessary to care for the poor, the sick, the hungry etc. she often implies that her ideological opponents often do not care about these things. The whole class usually agrees, I can tell from their reaction to such innuendo. This even confirms my suspicion about the left. Their caricature of libertarians as uncaring, selfish group of people is a façade – it is clear that many a progressive personally do not care at all the poor and the downtrodden. Given a choice between losing 10% of the pay and sending their friends to the poor house, most of the would choose the latter. They just accuse others of being uncaring. Charity and caring comes from one’s heart; its costs come straight out of one’s own pocket, but not according to these folks, to them it should come from their neighbor’s pocket. How else should I interpret this?
Off late there have been growing number of stories of malware issues and security problems with Apple Products. Today comes another story that Apple iPads have serious security bug that exposes its customers to hackers.
Some Apple customers choose to jail break their devices so they can download and run applications that are not approved by Apple or use iPhone phones on networks of carriers that are not approved by Apple.
Security experts warned that criminal hackers could download that code, reverse engineer it to identify a hole in iOS security and build a piece of malicious software within a few days.
Apple’s superiority, when it comes to security, is not a given. Any claims that Apple or it’s fans have made in the past were not given a real world test, not until now. That is not to say Apple products are inferior to it’s competition, far from it. Apple makes some of the best technology products out there in the market – a cut above the rest in most categories. It is just that hackers, malware creators, virus makers don’t want to attack a platform that no one uses. It is clear that those pesky malwares, trojan horses, viruses on your platform is, largely, a function of it’s popularity.
Apple is not made in heaven. It is made by normal imperfect human beings. Is that considered blasphemy?