Sriram Khé

Mr Obama goes to visit his creditors

2009-11-14T08:16:00.000-08:00

Ouch! Those headline writers in the UK and elsewhere can be brutal .... The title of this post is the editorial in Financial Times.
This editorial is one of the many that point out that we--the world--is in for trouble if the US dollar continues to be the world's currency, if the US continues with its what-me-worry approach, and if China continues to peg its currency to the dollar.

generalised concern about currencies; an as yet incomplete reversal of the strengthening of the dollar during the crisis; and a determination by the Chinese authorities to avoid appreciation against the dollar since the serious crisis began.

What is more intriguing to me is something Dan Drezner wrote about some time ago, where he noted:

It's the rest of the world -- articularly Europe and the Pacific Rim -- that are getting royally screwed by China's policy. These countries are seeing their currencies appreciating against both the dollar and the renminbi, which means their products are less competitive in the U.S. market compared to domestic production and Chinese exports.

The more time goes by, the more I am convinced that my rather nutty conclusion--it seemed like that then--might not be as nutty after all:

Sometimes I wonder whether China's interest in the US dollar, and keeping its yuan tied to the dollar, is to essentially bankrupt the rest of the world and the US so that it can ultimately prevail as the global power.

Remembrance of things past--the White House

2009-11-13T21:05:00.000-08:00

In 1994, we could go up close and personal and hang on to the fence and take photos. I am not sure what Bill Clinton was up to in the Oval Office when I clicked this photo .... muahahahaha

I have not been to DC since 9/11; will be there next year for the AAG annual meeting. I bet the city will look very different from how I remember it from 15 years ago.
Why the hell did bin Laden have to screw up things for practically the overwhelming majority on this planet :-(
Oh well, "there is no there there" ..... I wish it were otherwise ....

Why are we in Afghanistan? seriously ....

2009-11-13T12:51:00.000-08:00

The photos and read the text under each of them (ht).... Withdrawing the troops is seven-years overdue ... at least
The text under the photo that is to the left here:
Soldiers from the U.S. Army First Battalion, 26th Infantry take defensive positions at firebase Restrepo after receiving fire from Taliban positions in the Korengal Valley of Afghanistan's Kunar Province on May 11, 2009. Spc. Zachary Boyd of Fort Worth, Texas, far left was wearing "I love NY" boxer shorts after rushing from his sleeping quarters to join his fellow platoon members.

Hey Lou Dobbs, I will not miss you--I never watched your program :-)

2009-11-13T07:55:00.000-08:00

A long time ago--when Bernard Shaw was the news anchor at CNN--I remember watching that news channel a lot. For two main reasons: one, the internets was only a series of tubes (!) at that time, and the friendly web hadn't come into place. So, there was no way a junkie like me could get updated otherwise. Second, CNN was mostly only a news channel.
Then things changed--thanks to Faux News.
Soon, CNN also became a sensation-seeking shoutfest channel, with half the screen devoted to rolling ticker updates.
While I was smart enough to program my TV to skip the Faux News channel, I would pause every once in a while at CNN. But, Lou Dobbs? Nah!

As always, The Onion has the best news update on Dobbs' departure. The entire report is hysterical--the way it weaves in stereotypes after stereotypes that Dobbs' might have used in his rants, er, program. An excerpt:

Acting on anonymous tips from within the Hispanic-American community, U.S. Customs and Border Protection officials on Wednesday deported Luis Miguel Salvador Aguila Dominguez, who for the last 48 years had been living illegally in the United States under the name Lou Dobbs. ...
In addition to holding multiple jobs without ever obtaining a guest-worker permit or H-1B visa, "Dobbs" is reported to have collected welfare every month for nearly five decades. He appeared in good health when apprehended, having used Medicaid to obtain numerous health care services over the years, but immigration officials fear he still may have exposed the American population to the many infectious diseases illegal immigrants tend to carry, including both malaria and leprosy.

USA! USA! USA!!! .....

2009-11-13T07:43:00.000-08:00

The Economist:

according to new Gallup polling data gathered over the last three years, 16% of adults—or some 700m people—in over 130 countries say they would like to start a new life abroad. The most popular destinations specified are wealthy Western countries, though Saudi Arabia and the United Arab Emirates are also attractive. If everyone got their wish, America's population would swell by 165m while Canada, Britain and France would each gain 45m new migrants.

Outsourcing from Bangalore .... to rural India

2009-11-12T21:12:00.000-08:00

With more than a billion people, India is more a continent than a country. So, we can and should expect wage differentials within its own borders, which means that outsourcing can happen even from costlier urban areas to inexpensive rural areas.
At the same time, as I have blogged often, here, a college degree is way too hyped, and is quite an unnecessary credential for many of these jobs.
So, combine these two and this NY Times report is no surprise at all! Excerpt:

Now some businesses have begun looking to rural India for an untapped pool of eager and motivated office workers. Rural Shores has hired about 100 young people, most of them high school graduates who have completed some college, all of them from rural areas around this small town. The company has three centers now, but it aims to open 500 centers across India in the next five years.
Most of the center’s employees are the first members of their families to have office jobs. They speak halting English at best, but have enough skill with the language to do basic data entry, read forms and even write simple e-mail messages.
With much lower rent and wages than in similar centers in cities, the company says it can do the same jobs as many outsourcing companies for half the price. A Bangalore office worker with skills similar to those of workers here commands about 7,000 rupees a month, or $150, Mr. Srinivasan said. In small towns and villages, a minimum-wage salary of about $60 a month is considered excellent.
Here in Bagepalli, the Rural Shores office hums through two shifts a day. One set of workers answers customer service e-mail messages for an Indian loyalty card company. Another processes claims for an insurance company. In one room, workers capture data from scanned timecards filled out by truck drivers in the United States. They record nights spent in Abilene, Tex., deliveries in Kansas City and breakdowns in Salt Lake City, all of which the workers decipher and enter into a database.

A whole new world, every few days :-)

Party like it is 1999 :-(

2009-11-12T08:31:00.000-08:00

If only it were at least 1999, with respect to the S&P index

The Best F**king News Team Ever reports on the Berlin Wall

2009-11-11T14:05:00.000-08:00

The ending, with Jon Oliver, is simply fantastic :-)

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Legends of the Wall

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Health Care Crisis

Healthcare reform: subterfuge, and the triumph of hope over experience

2009-11-11T13:48:00.000-08:00

The House narrowly passes a healthcare reform bill. Next stop the Senate.
But .....
First, from this NY Times piece that reports on Maine's healthcacre efforts:

Maine is the Charlie Brown of health care. The state’s legislators have tried for decades to fix its system, but their efforts have always fallen short: health insurance premiums are still among the least affordable in the nation, health care spending per person is among the highest and hospital emergency rooms are among the most crowded. Indeed, many overhauls to the system have done little more than squeeze a balloon — solving one problem while worsening another.

But like the Peanuts character, the state keeps trying. Indeed, Senator Olympia J. Snowe, Maine’s senior United States senator and so far one of only two Republicans in Congress to vote for an overhaul, spent two years in the late 1970s as chairwoman of the State Legislature’s joint Health and Human Services Committee pushing small reform efforts. “That’s where I garnered an enormous deference to the issue of health care and its complexities,” Ms. Snowe said in an interview.

Maine’s history is a cautionary tale for national health reform. The state could never figure out how to slow the spiraling increase in medical costs, hobbling its efforts to offer more people insurance coverage.

And, then from John Cassidy's essay in the New Yorker:

So what does it all add up to? The U.S. government is making a costly and open-ended commitment to help provide health coverage for the vast majority of its citizens. I support this commitment, and I think the federal government’s spending priorities should be altered to make it happen. But let’s not pretend that it isn’t a big deal, or that it will be self-financing, or that it will work out exactly as planned. It won’t.

Many Democratic insiders know all this, or most of it. What is really unfolding, I suspect, is the scenario that many conservatives feared. The Obama Administration, like the Bush Administration before it (and many other Administrations before that) is creating a new entitlement program, which, once established, will be virtually impossible to rescind. At some point in the future, the fiscal consequences of the reform will have to be dealt with in a more meaningful way, but by then the principle of (near) universal coverage will be well established. Even a twenty-first-century Ronald Reagan will have great difficult overturning it.

That takes me back to where I began. Both in terms of the political calculus of the Democratic Party, and in terms of making the United States a more equitable society, expanding health-care coverage now and worrying later about its long-term consequences is an eminently defensible strategy. Putting on my amateur historian’s cap, I might even claim that some subterfuge is historically necessary to get great reforms enacted. But as an economics reporter and commentator, I feel obliged to put on my green eyeshade and count the dollars.

Ahem!

Abortion and healthcare reform

2009-11-09T22:27:00.000-08:00

Now it is big news (samples: click here and here)
Not news to me. I blogged about this back in September. Ha! I led that post with:

It has puzzled me that those opposed to health care reform have gone the insane route of using labels like socialism....when they could have scored a lot more points a lot easier by simply zooming into abortion. Of course, I am not the first guy to have thought about this. But, I still cannot understand why abortion did not become a populist issue in health care reform.

The Dalai Lama: next stop White House? :-)

2009-11-08T19:02:00.000-08:00

In an opinion column a few weeks ago, I wrote about two trips that the Dalai Lama had on his calendar: the visit to the White House to meet with President Obama, which was nixed by the President, and the visit to to Tawang. I wondered whether the Tawang visit will happen, given how China was clearly unhappy that the "splittist" was heading to a "disputed territory" ....

For once, a good update: the visit happened.

Now, let us see what Obama will do :-)

The unpredictability of history

2009-11-08T08:30:00.000-08:00

I was in graduate school--many times sleeping in a corner of USC's philosophy library or Doheny library--as the the Soviet Bloc started coming apart. It was surreal to watch the entire system come down. All of a sudden there was Latvia and Estonia and Lithuania, and soon after all that there was Yeltsin holding on to a new Russian beginning. Having grown up on Russian literature, I was all the more fascinated with the events and Gorbachev became my hero for carefully walking down the path of perestroika and glasnost.
The crazy thing for me as a student was that none of my faculty even remotely talked about such a possibility, say, in 1987 or 1988.
As Yogi Berra remarked, "Prediction is very hard, especially about the future"

Years later, as the summer season of the university's calendar was winding down, it was early in the morning as I was drinking coffee with NPR in the background when I thought I heard something about a plane crashing into the World Trade Center in NY. For two days after turning the television on at that moment, I sat transfixed and absolutely depressed by the even more surreal sights--I even skipped out on the back-to-school events on campus where, I later learnt, the university president had apparently highlighted a research work that I had just completed.
As much as people would like to assign blame as if it were all a pin-the-tail-on-the-elephant game, the reality is that this changed the world as much as the fall of the Berlin Wall changed the world. I am amazed that I have already lived through such major game changers in world history!

But, in recent years the dramatic game changers in global history have been quite regular, about a decade apart:

1968: the Tet Offensive
1979: annus horribilis
1989: The Berlin Wall tumbles down
2001: 9/11

It is then tempting to worry that the next event is round the corner. But, what I have learnt is this: I don't know where that will happen.

I don't think even Bruce Bueno de Mesquita knows
:-(

Israel/Palestine: quote of the day

2009-11-08T07:46:00.000-08:00

“When you’re serious, give us a call: 202-456-1414. Ask for Barack. Otherwise, stay out of our lives. We have our own country to fix.”

Thomas Friedman in the NY Times

"Sixth sense" .... the future is here?

2009-11-07T23:47:00.001-08:00

Cricket: not a critter but a religion in India :-)

2009-11-06T19:01:00.000-08:00

This poster says it all!

If only this were a simple little one nutty poster .... a year ago, the following was in the news:

"Cricket is religion in our country and Dhoni is god of cricket," his fan club president Jitendra Singh said.
"We'll construct a huge temple of Dhoni in Ranchi and have a priest who will pray to him every day."

But, the good thing is that as much as real religions are losing their base, and the number of irreligious or casual believers is on the rise, even the religion of cricket (!) is losing its audience--even in India! Why? well, as all religions tend to do, well, the cricket priests also decided to extract way too much from the gods and the believers now can't afford to tithe like they used to, I guess. Here is from one report titled "How cricket became boring" (ht):

It was unthinkable. That a day would come when the urban Indian male would admit he is bored of cricket. But the truth is that the sport is fast losing its charm among its most commercially influential devouts

Notice here the usage of "devouts." The author writes:

The board knows that the wealth of Indian cricket is a consequence of this nation’s complex love for the sport and that anything which affects this love would have financial repercussions.

So, yes, the high priests are concerned. Now, if it is a religious crowd, then what happens? Well, a new religion creeps in and tries to sweep up a few dejected believers. That is what is happening in India, where football (ahem, soccer here in the US) is gaining a fan base so much so that the son of one of India's older and living cricket gods, Sunil Gavaskar, himself is attending services at the other religious sport:

From the equally powerful world of cricket, Rohan Gavaskar has entered the fray. He has bought a stake in the Pune FC football club.

Hmmm ..... the gods must be crazy :-)

10.2%? OMD!!! Where will it end?

2009-11-06T11:52:00.000-08:00

Outsourced to Derek Thompson:

1) The last time unemployment crossed the 10 percent barrier was September 1982. It stayed above 10 percent for nine months. Nine months from now is the August of a mid-term election year. Bad news for Dems.

2) The broader measure of unemployment, which includes part-timers and people who have stopped looking for work, hit 17.5 percent. This broader measure of unemployment will start to converge with official unemployment before the official rate goes down.

3) It's hard to have inflation when almost one-fifth of a consumer-driven economy is out of work, under-worked or discouraged from looking for work at all.

4) Increased productivity sounds like a good thing, but for at least 17.5 percent of the population, it's not. Employees are squeezing more out of their workers, even with part-time work at an all-time high. That means they'll be morel likely to add hours than add workers as the economy picks up.

5) After dithering on jobless benefits for weeks, Congress just happened to extend unemployment benefits the day before unemployment crossed 10 percent. Sounds like somebody on Capitol Hill was tippped off about today's shocking figure, which was 0.3 percentage points higher than analysts expected. What did Congress know and when did they know it?

Remembrance of things past-7: Que sera sera

2009-11-05T23:11:00.000-08:00

GM is guilty of "autocide" for killing Saturn

2009-11-05T21:09:00.000-08:00

Cable TV News: quote of the day

2009-11-05T16:33:00.000-08:00

Using [cable TV news] as a gauge of how divided we are is like using the National Hockey League to estimate the level of violence in America

Great point, Steve Chapman.
He adds:

According to a 2008 survey by the National Opinion Research Center, when you give them more options—extremely liberal, liberal, slightly liberal, moderate, slightly conservative, conservative, or extremely conservative—you find that the largest ideological group is moderates, with 37.3 percent compared to 34.5 percent for the three conservative groups combined.
Add up the moderates and those who are only slightly liberal or slightly conservative and those who don't know—those clustered in the middle of the road—and you've got about two-thirds of the citizenry. As political scientists Morris Fiorina of Stanford's Hoover Institution and Samuel Abrams of Harvard put it, "the American electorate in 2008 is much better described as centrist than polarized."
Moreover, they note in a forthcoming paper, the public is not getting more polarized. "In terms of their ideological orientations," they note, "the American electorate looks about the same as it did when Democrat Jimmy Carter defeated Republican Jerry Ford in the not very polarized 1976 election"—Carter being conservative by Democratic standards and Ford moderate by GOP standards of the day.

In advance of Veterans Day

2009-11-05T16:17:00.000-08:00

The road to hell is paved with good intentions

2009-11-05T08:59:00.000-08:00

Six months ago, I wrote in an opinion column that “how events unfold in South and West Asia this summer will have immense implications even for those of us halfway around the world.”

The two main events I referred to then were the presidential elections in Iran and Afghanistan. But, it was beyond my wildest imagination that both the incumbent presidents and their governments would engage in massive electoral frauds in order to skew the results in their favor. Particularly in Afghanistan with the entire world watching, and with the United Nations helping with the logistics of the elections.

Yet, that is how the story unfolded.

In Iran, protests spontaneously erupted immediately after the rigged election results were made public. But, the reports of arrests of dissidents since then, and their torture and even death in jails, are absolutely depressing developments.

In Afghanistan, the ineffective Hamid Karzai successfully cooked up the election books. His main challenger, Dr. Abdullah Abdullah, has withdrawn from a runoff election that was hastily scheduled for November 7^th, which has now been cancelled.

Meanwhile, neighboring Pakistan seems to be speeding down towards anarchy.

Thus, mid-autumn it is now, and I am all the more worried.

Try as I might to be cheerful about the outcomes in these three countries, I am unable to because there is now yet another electoral signpost that we are rapidly approaching—general elections in Iraq.

January 16, 2010 is the date when Iraqis will cast their votes in the parliamentary elections. Iraq’s election commission will need at least 90 days to carry out the elections in accordance with the law. However, the parliament is yet to approve of the electoral law that will govern these elections and the deadline for a final election plan has come and gone.

The key disagreement is over voter registration in the oil-rich Kirkuk. Kirkuk is in northern Iraq, which is a Kurd-dominated part of the country. The question that remains unresolved is how to count the city’s Kurds, Arabs, and the Turkmen, who are the main ethnic groups there.

It is not as simple as a head count. Because, when Saddam Hussein was in power, his regime unlawfully evicted Kurds and encouraged Arabs to settle there. So, naturally, after the US removed the dictator, the Kurdish population returned home in huge numbers.

The parliament has to decide whether only the current population and their residencies count, or whether voter registration records from a few years ago are valid. A current one would favor the Kurds, while using older registration data would, obviously, be advantageous to Arabs and Turkmen.

It appears that the Kurds have drawn the metaphorical line in the sand. Their demand for current data and for Kirkuk as one single constituency has no possible middle ground with the demands from the other sides that records from 2004 or 2005 be used, or that Kirkuk be split into two constituencies.

Kurdish representatives, therefore, boycotted the discussions. If, on the other hand, the parliament approves a plan that overrules the objections raised by the Kurds, then there is a possibility that it will be vetoed by the Iraqi president—who is Kurdish!

If elections are not held as scheduled, then technically the current government has no legality to continue on past January.

To review then: Iran’s elections were rigged. Afghanistan’s elections were rigged. Pakistan is in disarray. Iraq’s elections in January are in doubt.

If there is a common thread to all these, it is simply that all these are countries that have been experiencing internal strife for decades now. Iran is yet to recover from the disastrous coup d’etat in 1953 that overthrew the democratically elected government, and the later theocratic revolution led by Ayatollah Khomeini. Afghanistan was practically in a civil war that only worsened after the Soviet tanks rumbled in back in 1979. Pakistan has never really been stable ever since its creation in 1947. And Iraq needs no introduction to the American audience.

Despite all these, if we expect elections to somehow magically transform these countries, well, that is worse than naïve optimism

Remembrance of things past-6

2009-11-04T23:03:00.000-08:00

Click here for a rough translation

Scientific Predictions

2009-11-04T11:50:00.000-08:00

From: The Scientist

Some famous (and infamous) predictions

YEAR	PREDICTION	RIGHT OR WRONG?
1869	Dmitri Mendeleev’s periodic table left spaces for elements that he predicted would be discovered. Three of these (gallium, scandium, and germanium) were subsequently discovered within his lifetime.	RIGHT
1964	Physicists predict the existence of the Higgs Boson. If CERN’s Large Hadron Collider finds no evidence for the existence of this massive fundamental particle, working models of the material universe might require a fundamental rethink.	PENDING
1965	Intel cofounder Gordon E. Moore predicts that the number of transistors on a computer chip would double every two years. The industry has so far managed to keep up (despite many predictions over the years about the law’s imminent demise).	RIGHT
1968	Entomologist Paul Ehrlich predicts that hundreds of millions of people will starve to death in the next two decades.	WRONG
2002	At the website longbets.org, astronomer Sir Martin Rees, president of the Royal Society, predicts that “By 2020, bioterror or bioerror will lead to one million casualties in a single event.” Also at Long Bets, entrepreneurial engineer Ray Kurzweil bets $10,000 that by 2029 a computer will have passed the Turing Test for machine intelligence.	PENDING
2003	Cold Spring Harbor Laboratory sponsored GeneSweep, a sweepstakes on the number of human genes. While bids averaged around 60,000 genes, it was eventually won by a bid of 25,947—the lowest of the hundreds received.	WRONG
2007	The Intergovernmental Panel on Climate Change’s 4th Assessment Report projects that global surface air temperatures will increase by between 1.1 and 6.4°C over preindustrial levels by the end of the century.	PENDING

Punditry: speculating about what to speculate :-)

2009-11-04T11:06:00.001-08:00

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Indecision 2009 - Reindecision 2008 And Beyond

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Hurry up: FREE golf carts

2009-11-04T00:09:00.000-08:00

No, it is not from the Onion.
An excerpt from the WSJ: (ht)

"The Golf Cart Man" in the Villages of Lady Lake, Florida is running a banner online ad that declares: "GET A FREE GOLF CART. Or make $2,000 doing absolutely nothing!"

Golf Cart Man is referring to his offer in which you can buy the cart for $8,000, get a $5,300 tax credit off your 2009 income tax, lease it back for $100 a month for 27 months, at which point Golf Cart Man will buy back the cart for $2,000. "This means you own a free Golf Cart or made $2,000 cash doing absolutely nothing!!!" You can't blame a guy for exploiting loopholes that Congress offers.

The IRS has also ruled that there's no limit to how many electric cars an individual can buy, so some enterprising profiteers are stocking up on multiple carts while the federal credit lasts, in order to resell them at a profit later. We should note that some states, such as Oklahoma, have caught on to the giveaway and are debating whether to cancel or limit their state credits. But in Congress they're still on the driving range.

... If this keeps up, it'll soon make more sense to retire and play golf than work for living.

Yes, true even if sounds way too bizarre to be true!