Growth Matters

Aid, Marketing and Faking Accountability

noreply@blogger.com (Clement Wan) — Wed, 28 Oct 2009 01:54:00 +0000

Bill Easterly's Aidwatch has a good new post on the Bill and Melinda Gates' "successes" in fighting malaria in Zambia.

Preparing to return to a long dark winter (and a few notes on microfinance)

noreply@blogger.com (Clement Wan) — Wed, 28 Oct 2009 00:57:00 +0000

Perhaps the recent cold miserable winters have something to do with the fact Americans are starting to lose interest in global warming (via the Opinionator, NYTimes). Myself, I'm just dreading my returning to the cold from the considerably more tropical climes of China (not to mention Cody) though it's been a rather busy visit and I haven't yet finished everything I've wanted. As something of a PSA, here's a posting on how to put together an emergency winter kit.

I also wanted to welcome any new readers (I seem to have gotten a small spike) from a recent mention on the MicrofinancePracticeGroup listserv (Nabble) where I'm a sometimes and reluctant participant. It certainly wasn't publicized in the most complimentary of ways, but appreciated none the less.

While I'm not convinced that I'm not an ideologue - particularly if that means I'm driven by a set of beliefs and ideas, but I'd like to think that in the very least I'm pragmatically so. And insofar as my interest in microfinance and development goes, I have a few strong opinions as to what will work and what won't based on what has worked and what hasn't. While I can't say that it's changed much since I first became a participant on the group, and while there are clearly a number of notable exceptions, I find it most unfortunate particularly for those in under developed countries, that for some participants, microfinance is nothing more than another form of social activism where the laws of economics and reality have no place.

For me, the most fundamental question in this debate over high interest rates and profitability in microfinance is not whether I or anyone else feels uncomfortable or finds it "reprehensible" or "indensible", but rather, does it work? Paradoxically, the evidence seems to suggest it does (WSJ) - just as economic theory suggests it should. Further, I find it strange that these same social advocates refuse to acknowledge that a choice often exists between the provisioning of financial options and high(er) interest rates.

Borrowers readily accept these options given that the alternatives are not only worse, but in the case of working capital loans they're able to achieve returns significantly greater than the interest rates charged. Microfinance is also not a panacea. It's not the ideal intervention in countries where the basic preconditions for economic do not exist - ie political stability and property rights, it's an accelerant to the seed of entrepreneurship that exists in all cultures because of the search to build a better world not only their progeny but the rest of us.

Finally, a travel guide I can use...

noreply@blogger.com (Clement Wan) — Tue, 27 Oct 2009 06:57:00 +0000

Internet speeds and costs around the world (courtesy of SwissMiss):

Learning Engrish

noreply@blogger.com (Clement Wan) — Mon, 26 Oct 2009 01:44:00 +0000

So I've been swamped in China and it hasn't quite been convenient to post but I thought I'd briefly break my silence to let a few people who care about these things that I'm still alive.

A number of my colleagues use this English learning software that teaches them a phrase each day though I'm beginning to wonder about the content provider's sense of humor. Today's phrase? "Do you get a kick out of watching me suffer?" to which I of course happily responded "yes."

The Power of Lean Startups

noreply@blogger.com (Clement Wan) — Wed, 07 Oct 2009 06:23:00 +0000

If you're interested in startups, watch this video! It makes a number of remarkable observations of how and why this is an amazing time to develop a startup while increasing the probability of success -

Oddly seductive

noreply@blogger.com (Clement Wan) — Wed, 07 Oct 2009 06:17:00 +0000

As I rush to tie up loose ends before I head back to China - while Crunchgear might find it too creepy to have around, I think these are pretty cool... It's made by Panasonic and it seems to already be in the market in Japan. This could replace your Roomba (I find it somewhat remarkable how many people I know have Roomba's) - a robotic pillow-like slug:

Stewart Brand: urbanization, development and environmental 'heresies'

noreply@blogger.com (Clement Wan) — Sat, 03 Oct 2009 02:51:00 +0000

From "the man who helped usher in the environmental movement in the 1960s and '70s has been rethinking his positions on cities, nuclear power, genetic modification and geo-engineering."

While he's clearly gotten a lot more optimistic in many ways, his views on resources in the long run (and his view that we'll have resource wars) are, um, limiting and are still wrong because they discount energy substitutes like natural gas, and advancements in technology. Still, some pretty brilliant observations on development and urbanization. Watch the presentation here (TED):

Must be in a silly mood...

noreply@blogger.com (Clement Wan) — Thu, 01 Oct 2009 23:16:00 +0000

Had a good chuckle over this (Instapundit).

Why additional education spending isn't the answer

noreply@blogger.com (Clement Wan) — Wed, 30 Sep 2009 23:48:00 +0000

[No matter the question]. Granted, this American data - but it's as remarkable as it is dramatic (Cato) - charting US federal spending per pupil and results since 1970:

The Media Disconnect

noreply@blogger.com (Clement Wan) — Tue, 29 Sep 2009 16:18:00 +0000

As a libertarian and "believer" (if you can call it that), in free markets, one of the biggest problems I have explaining/figuring out is how some of the traditional media outlets have survived for so long when their facts can be so easily verified and questioned.

Granted, their power (and economic power) is waning and has only been accelerated by the net, but given that they can't possibly be surprised about the unprecedented levels of access that the net provides. I can't tell if they're just remarkably sloppy or actually willful in their disregard for what a reasonable person might consider reality. Sometimes I wonder if there's much of a difference in the quality of news put out by state actors than the level of group think coming out of dead tree journalists.

Let's ignore for a moment what you might think of the more prominent political examples of Acorn or even Van Jones (US News). Let's look at Roman Polanski.

I've long been a fan of my.yahoo.com because it provides me with what various wire agencies like AP and Reuters consider their top news stories sorted according to things like top news, top international news, etc.. It provides me with some perspective of what I might otherwise miss from my overflowing blog reader. So let's compare and contrast.

Admittedly, I learned first of the Roman Polanski story (that he was arrested - though I had heard of his "plight" long ago, and even sympathized with him because I thought it was just a simple case of statutory rape - ie sex with a minor that happened long ago) from Instapundit that in turn linked from Megan McArdle who states: "You would think we’d busted him for unpaid parking tickets. The guy drugged a thirteen year old girl in order to rape her."

I glance over this morning to the Associated Press and one of what they call their top international news stories: "Polanski asks Swiss court to free him from custody". Nowhere in the article do they say anything about the drugging - in fact they go on to state: "His victim, Samantha Geimer, who long ago identified herself, has joined in Polanski's bid for dismissal."

Alright, I may even accept that some 13 year olds look older well beyond their years. That said I've also been a fan of Megan McArdle, but we all have our bad days and maybe McArdle was just being particularly unsympathetic in a case of what the AP seems to play off as a case of consensual sex admittedly with a 13 year old - and a more youthful indiscretion in the case of Mr. Polanski. Heck, apparently even the person he 'raped' doesn't seem to think it was that big of a deal - which is sort of magnanimous of her - so maybe it was consensual? After all, this is a man whose achievements that the AP goes to great lengths to extol.

So I googled "Samantha Geimer". One of the first articles: Polanski Rape Victim: ‘He Took my Innocence’. Here's an excerpt:

Samantha Geimer — known as Samantha Gailey when the film director plied her with champagne and sedatives before assaulting her when she was just 13 — says the filmmaker knew what he did was “wrong”.

“What he did to me was wrong and he knows it was wrong, I’m still living with it today,” the 45-year-old former model said in an interview in 2005. “He took sex from me and at the same time my innocence.

Granted, the article doesn't say she hasn't joined the bid for dismissal - but surely, her views would merit more than a one liner - unless of course the editors chose to admit it because it didn't fit within the general thrust of the story - ie 'those crazy puritan American bumpkins - how dare they attack a film icon'.

Frankly, I view this story is largely inconsequential (at least to me - there are enough things in the world to be outraged by) beyond what appears now to be the AP's complicity in Roman Polanski's predatory rape of a child. But it defies imagination that some of these journalists are the same ones who lament the stupidity of the general public for not supporting what is supposedly a public good. Let's assume for a moment that they've just been willfully ignorant. At the very least, it makes you wonder what else they aren't covering - especially on issues that have greater meaning and impact to most of us.

As I think Glenn Reynolds pointed out a long time ago, the traditional media outlets aren't being killed by the internet. This is suicide.

Howard Kurtz, a columnist at the Washington Post notes: "If Polanski was an ordinary Roman, and not an award-winning film director, we wouldn’t be having this debate. There is sympathy for him because he’s considered a great artiste. The Hollywood elite wouldn’t give Polanski the plumber the time of day if he had sexually assaulted an underage girl. And that suggests to me a stunning double standard."

Glenn Reynolds goes on to say "You can tell a lot about a governing class from who it’s willing to cover for." Truly.

What I've Been Reading

noreply@blogger.com (Clement Wan) — Sun, 27 Sep 2009 23:43:00 +0000

I think there have been a number of particularly great articles especially under what I've termed "Productivity, Psychology & Inspiration". Yeah, it seems like the interesting list keeps getting longer... though I suppose maybe this means I should post it more frequently.

Development
Making fun of celebrity advocates (aid watch)

China
Profits at State Owned Enterprises down 20% (chinaeconomicreview.com)
Stricter rules require government officials to disclose assets (reuters.com)
China inflation could spark yuan appreciation in 2H09 (chinaeconomicreview.com)
Don't worry about inflation in China ... for now (eapblog.worldbank.org)
The dollar is dead - long live the renminbi (telegraph.co.uk)

Economics, Politics & Regulation
Outfoxing the chicken tax: People respond to (perverse) incentives (gregmankiw.blogspot.com)
Telegraph: The UN loves Barack Obama because he is weak (telegraph.co.uk)
[Proud to be Canadian:] Canada boycotts Iranian UN speech (ottawacitizen.com)
Family businesses prioritize survival over profitability? (economist.com)
For those who want legislators to read every word of every bill (volokh.com)
How i became a Keynesian (tnr.com)
2010 State Business Tax Climate Index (taxprof.typepad.com)
And don't let us catch you being neighborly again (reason.com)

Technology & Trends
The NetFlix prize - another success for crowdsourcing (bits.blogs.nytimes.com)

Productivity, Psychology & Inspiration
Tightwads and big spenders are attracted to each other and then make unhappy marriages (futurepundit.com)
Why you should buy 5 year old car and sell it after 10 years. (PDF) (infochimps.org)
Catch a liar by making him draw (neuronarrative.wordpress.com)
If you need to work better, maybe try working less (wsj.com)
We're more likely to behave ethically when we see rivals behaving badly (scienceblogs.com)
Examine hand gestures and smiles to detect lying (lifehacker.com)
Susquehanna: an inspirational tale in the world of finance (phillymag.com)
33 ways to get and keep yourself motivated (dragosroua.com)
Meet the man who sells $89 million of diapers each year online (inc.com)

Strategy, Sales & Marketing
Business development: Forming partnerships, brand extensions (sethgodin.typepad.com)
Wronged customers respond better to apologies than cash (economist.com)
Biggest sales management coaching blunders (sellingtobigcompanies.blogs.com)

People Management
The kinds of employees you want to hire (businessweek.com)

On "Bad" Profits

noreply@blogger.com (Clement Wan) — Sun, 27 Sep 2009 22:43:00 +0000

Ranting on regulations that will end up restricting biotech at the expense of big pharma in the new healthcare bill (the Atlantic):

Profits are good when they result from providing a service people want. When they are the result of capturing the government by cutting special deals, they're immoral and inefficient. And this is just the beginning . . .

This at least explains big pharma's support of the recent US healthcare bill.

Why I hate checking luggage

noreply@blogger.com (Clement Wan) — Wed, 23 Sep 2009 06:44:00 +0000

Pretty hilarious standup routine by Welshman Rhod Gilbert:

The Case against Paternalistic Regulation

noreply@blogger.com (Clement Wan) — Mon, 21 Sep 2009 20:55:00 +0000

Paternalistic regulation is the regulatory equivalent of micromanaging - and in many cases a great deal worse. The allure of the supposedly educated saying that they know better than the rest of us is rarely resisted by our political elite. I can't help but think that it's a bit ironic that many of my friends are elitist (and truth be told I can both be a bit of a micromanager and an elitist).

Ilya Somin (via Instapundit) presents a great case against paternalistic regulation. I think Glenn Reynolds summarizes it the best though when he says "my bottom line: Do you think politicians are smarter and more self-disciplined than the rest of society? And if not, why would they be better at deciding for us than we are at deciding for ourselves?"

Even More on the World Bank's Doing Business Report

noreply@blogger.com (Clement Wan) — Mon, 21 Sep 2009 20:37:00 +0000

They seem to be really developing their willingness to use social networking to get the word out having put up a video on YouTube:

Good news - especially for those in the developing world, that it's getting easier to do business.

What I've Been Reading

noreply@blogger.com (Clement Wan) — Sun, 20 Sep 2009 23:23:00 +0000

Development
Real & sustainable development: Nokia offers phone installments in India (wsj.com)
Hans Rosling: Why the statistics point toward progress (businessweek.com)
Small change: does microlending actually help fight poverty? (boston.com)

China
China keeps buying Treasurys, confusing Nationalists (wsj.com)
Taiwan & China: Reunification by trade? (economist.com)
Call for more babies as China turns to grey (timesonline.co.uk)

Economics, Politics & Regulation
Obama admin: cap and trade could cost families $1,761/year (cbsnews.com)
Bad timing: Abandoning missile defense on 70th anniversary of Stalin's invasion of Poland (volokh.com)
"Chaotic legacy of Carter’s mind-boggling cowardice and incompetence" (slate.com)
Instapundit: "a foul old man, and a disgrace to the office he once held" (instapundit.com)
Sweden slashes income taxes to promote job growth (breitbart.com)
Being highly positive: disastrous for individuals, great for society (businessweek.com)

Technology & Trends
Liposuction leftovers' easily converted to stem cells (med.stanford.edu)

Productivity, Psychology & Inspiration
Vinegar + baking soda will boost absorbancy of old towels (lifehacker.com)
Common fallacies in investing and decision making (morningstar.com)

Strategy, Sales & Marketing
Think of your future relationship when negotiating (theprivateequiteer)
Startups often forget about distribution and cost/how to get out there (pehub.com)
Plan to be flexible: Events often overtake companies (avc.com)
Greetings: Introducing yourself the right way (techcrunch.com)

People Management
Right (and wrong) ways to part with a long time employee (fistfuloftalent.com)
Climbing the wrong hill: considering another career (cdixon.org)

Fidelity, Convenience and Higher Ed

noreply@blogger.com (Clement Wan) — Sun, 20 Sep 2009 23:15:00 +0000

More on the meme that education is a sector ripe for disruption. From BusinessWeek:

The vulnerability sensed by McNealy, Fransen, and others has a lot to do with a concept I've been writing about the past few years—the fidelity swap. In our everyday lives we constantly make trade-offs between fidelity and convenience. Fidelity is the total experience of something. At a rock concert, for instance, it's not just the quality of the sound—which often isn't as good as listening to music on a good stereo—but everything else, too, such as the show's ambience and the bragging rights that come with having seen the band live. Convenience is how easy or hard it is to get what you want. That includes whether it's readily available, whether it's easy to do or use, and how much it costs. If something is less expensive, it's naturally more convenient because it's easier for more people to get it.
As it turns out, the most successful products and services tend to be either high in fidelity or high in convenience—one or the other, but not both. In fact, products attempting to be both typically end up with a confused brand. [...] College is a high-fidelity experience. [...] you engage in a rich, all-encompassing experience for four years.

It bears noting that this doesn't apply only to education. But insofar as education goes, be prepared for the "good enough" degrees of convenience.

Paul Krugman, Re-Examined

noreply@blogger.com (Clement Wan) — Sat, 19 Sep 2009 23:49:00 +0000

At times it feels like the Nobel Prize committee puts politics ahead of achievements - as is almost generally the case of the Peace Prize. The Prize in Economics however was somewhat odd having been awarded to Paul Krugman in 2008 for work done in 1991 but whose work in recent years can more charitably be characterized as being sloppy (particularly his insight, or lack thereof of finance and how financial markets work).

Here are two open letters to Krugman that can best be described as devastating relating to some of his recent writings:

"How did Paul Krugman get it so Wrong?" by John K Cochrane, University of Chicago Booth School of Business, and
"An Open Letter to Paul Krugman" by David K Levine, John H. Biggs Distinguished Professor of Economics, Washington University in St. Louis

There's more from Donald Luskin, but I'd read both - they're easy reads but if I were to guess, the corrections relate to errors that were made by Krugman likely out of political considerations than sincerity which is unfortunate.

Collusion and Free Markets...

noreply@blogger.com (Clement Wan) — Sat, 19 Sep 2009 23:39:00 +0000

... are incompatible. It remains one of those annoyances of mine that supposedly "socially minded" individuals complain that the natural outcome of free markets/capitalism is collusion and autocracy. From Greg Mankiw, a reminder of the words of Adam Smith:

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.

A Peak Oil Hypothesis I Can Agree With

noreply@blogger.com (Clement Wan) — Sat, 19 Sep 2009 06:39:00 +0000

Iain Reid, a senior oil analyst at Macquarie Bank points out that even over time, the threat to oil prices may not be so much the existence/supply of oil (FT Energy) but "but problems of access, technology and risk". He goes on to acknowledge that while policy and limits of existing technology are significant threats, new technology and reformed policies can also create the biggest opportunities.

Personally, I'd also like to hope that embedded in 'wildcard' of technology exists not just the hope but the likelihood of improved energy substitutes like natural gas (the Oil Drum) or even solar (Wired). Which is to basically to say that I don't think we should be so specifically on oil which may be limited in the short and even medium run, but the availability of more broadly energy, which in the long run is in practical terms unlimited and reducing the friction between the different forms.

The "Front-end" and User Interface (UI) as competitive advantage

noreply@blogger.com (Clement Wan) — Sat, 19 Sep 2009 06:27:00 +0000

There's a story on TechCrunch that highlights how Adobe and Yodlee created the technical backbones that allowed for the success and ultimate sale of YouTube and Mint.com (for $170M USD on Sept 14, TechCrunch):

A lot of people at Adobe weren’t all that happy when YouTube was acquired by Google for $1.65 billion in 2006. After all, YouTube was just a pretty front end to the core Flash web video technology created by Adobe. YouTube got rich. Adobe got peanuts.

Mint, which sold to Intuit earlier this week for $170 million, is Yodlee’s YouTube. That’s because, like YouTube, the core technology behind Mint wasn’t developed in house. It was licensed from Yodlee, who got paid very little for what they provided.

I think this just highlights the advantage of a good user interface (UI) / front end relative to a web product or service. In fact, you could almost say that it's the most important point of differentiation when it comes to the web. It's the interface that allows users to leverage the underlying technology and without which, the technology would be useless - but take care to put function before form.

At ReadWriteWeb, designer Warren Benedetto distinguishes between design and the user interface, cautioning: "If you have a great app that is easy and intuitive to use, it doesn't really matter what it looks like (e.g., Craigslist, Del.icio.us, Google, 37signals' products, the original Twitter design, even Amazon and eBay). By the same token, a great-looking app with poor usability will generally not fly very far. Quality trumps aesthetics every time."

China's Coming "Magnificent Bubble"?

noreply@blogger.com (Clement Wan) — Thu, 17 Sep 2009 21:38:00 +0000

I think this presumes that one doesn't exist already. James Saft of Reuters makes the case as follows:

If and when China makes its currency convertible and opens its financial system the stage will be set for a bubble that should make the dotcom and housing booms look tame [...] “In the medium term we face the mother of all asset bubbles in China. The fundamental story is a good one; there are just lots and lots of people to sell to,” Grice said.

“If you drop a ton of liquidity on people it is possible that they will do rational things with it, but more likely they will do something pretty stupid.”

I think there are a few problems with this argument including that if I recall, the Japanese banking sector wasn't hiding a large number of underperforming loans. That came after - after the real estate collapse. There's already a sense from within China, at least amongst the people I speak with, that China's growth is unsustainable. Bringing down the restrictions on the RMB could also result in a great deal of capital fleeing China. I'm rather bad at guessing when bubbles will pop or trying to figure out irrational people, but I think it's useful to have your bets hedged in this case.

What I've Been Reading

noreply@blogger.com (Clement Wan) — Wed, 16 Sep 2009 22:11:00 +0000

I'm still ploughing through my old links so here's the next batch of articles I found interesting:

Development
The problem with non - as in "non-profit" (sethgodin.typepad.com)
The importance of microfinance and property rights go hand in hand (thomaspmbarnett.com)
Are the new global capitalists African? (thomaspmbarnett.com)
The history of "development": racist, imperialist and British? (aid watch)

China
China’s demographic roller coaster to peak by 2030 (allroadsleadtochina.com)
China's footprint in Africa: once upon a coup (pbs.org)
Warnings for executives and their laptops/phones travelling to China (crn.com.au)

Economics, Politics & Regulation
Bottom or not, homebuilders are buying (realpropertyalpha.com)
Revealed: the ghost fleet of the recession (dailymail.co.uk)
After the stimulus: the hangover (john stossel)
Oregon at risk of contracting California disease (newgeography.com)
Reputations one year after the financial crisis (kedrosky.com)

Productivity, Psychology & Inspiration
Rebecca Saxe: How we read each other's minds (ted.com)
Be a Monday person: Friday people are unhappier and angrier (lifehacker.com)
Boost your memory power with a 30-second eye exercise (lifehacker.com)

Sales & Marketing
Learn about clients from their table manners (core77.com)
What alienates top performers (harvardbusiness.org)
How to stay relevant in sales (inc.com)
Buy somebody lunch (whattofix.com)
Cutting back on business travel could reduce profitability by 17% (i2i-align.com)
Activating your LinkedIn network (inc.com)
When considering promotion, think emotion (inc.com)

Fungus-treated Violin Outperforms Stradivarius

noreply@blogger.com (Clement Wan) — Wed, 16 Sep 2009 21:59:00 +0000

As a (former) violin player, there's something both sad and amazing about this story (ScienceDaily):

The violin they had created using wood treated with a specially selected fungus was to take part in a blind test against an instrument made in 1711 by the master violin maker of Cremona himself, Antonio Stradivarius. [...] Of the more than 180 attendees, an overwhelming number – 90 persons – felt the tone of the fungally treated violin "Opus 58" to be the best. Trusler’s stradivarius reached second place with 39 votes, but amazingly enough 113 members of the audience thought that "Opus 58" was actually the strad! "Opus 58" is made from wood which had been treated with fungus for the longest time, nine months.

There's something immensely empowering to know that this essentially democratizes the soul of a Stradivarius. On the other hand, there's a small part of me that thinks it's a bit of a small loss that a symbol of human achievement like the Stradivarius may in fact be replaceable and even superceded.

On why college costs too much

noreply@blogger.com (Clement Wan) — Wed, 16 Sep 2009 20:11:00 +0000

The basic idea? The barriers to competition (Reason.com). Fortunately that may change..

Related here: "Study finds online education beats the classroom" (NYT)