For more about me, please read this.
Ever wonder what?
Well, a true-blue libertarian would exercise his right to bear arms and wait for a chance to shoot Santa for trespassing private property.
Hey Santa! Merry Christmas! BAMN!
Oh, wait, wait. Merry Eid-mas! (That would make somebody scream in horror! LOL!)
This is a weird article, weird in a way that the economic rationale does not make sense at first glance:
THE Government will not increase the number of permits to import wheat flour, as there is enough supply of the commodity in the country, reported Mingguan Malaysia.
Deputy Domestic Trade and Consumer Affairs minister Datuk S.Veerasingam said the price was still fixed at RM1.35, but admitted that the price of wheat flour in the international market had shot up by 70%.
Veerasingam was commenting on a statement by the Federation of Malaysian Consumer Association (Fomca) president Datuk N. Marimuthu that the Government should increase the number of permits to curb price increases.
Veerasingam explained that it would not make a difference if the Government increased the number of permits, as the international market controlled the price of wheat flour. [No extra permits to import wheat flour. The Star. December 24 2007]
Let me summarize that. Fomca is suggesting the government to increase permits in order to reduce price. While that may be the case in typical economic model, given situation in the market, it simply does not work like that.
Even if countless permits are issued to the point that permits are made effectively useless policy-wise, price will not move unless the fixed price regime is done away with. Permits restrict the availability of goods in the market, if the number of permits is below that of equilibrium. The article does not make clear if international prices are higher than local counterparts but judging from the sentiment of the article and current trends, it is likely that that is the case.
What a permit quantity increase will do instead in the current Malaysian context is to widen the availability of wheat flour in the market assuming there is a shortage of wheat flour and by extension, permits, which again, seems the case here.
With higher international prices, there is a upward pressure on local prices. If the local price control mechanism is done away with, price will actually go up to equalize with international prices. Because of that and the fact that Malaysia is a small and relatively open market economy, I do not have a reason to believe the price could actually go down, unless it rains flour. There is no reason to believe that Malaysian prices will significantly affect international prices downward either, if Malaysian prices are forced to be artificially lower than international prices.
One of the few things that will go down is the frequency of wheat flour smuggling from the local to international market. Smaller prices differential between the local and the international markets erodes incentive for smuggling.
Despite that, if Malaysia was an autarky with no opportunity for smuggling activities at all, increase in permits would reduce equilibrium prices, in a market with flexible price regime. So, I think, Fomca might actually be thinking within this framework when the representative made the statement as reported in the article above. But the existence of fixed price regime and higher international price compared to local prices render Fomca’s rationale false.
Nevertheless, I am partial to Fomca calls to increase the permits. Their rationale maybe wrong but hey, when the goal is the same, I am bound not to care too much for the difference in methods in achieving that goal. Increase in permit quantity provides a more liberal atmosphere than the status quo. Of course, nothing beats a total liberalization where free market reigns supreme, providing allocative efficiency to the society.
p/s — After some more thought, I find the whole thing confusing. If international prices are higher than local prices, there will be an outflow of good from the local to international market. So, what is the point of import permits?
I found myself at the Tugu Negara yesterday.
The names are on the monolith, the Cenotaph, close to the main entrance of the Tugu Negara complex. Other photos shot within the complex posted on this blog are the Tugu Negara itself and the Pavilion that acts as an elaborate gate to the statue.
Something to start off the day (via):
WASHINGTON—In an unexpected reversal that environmentalists and scientists worldwide are calling groundbreaking, President George W. Bush, for the first time in his political career, openly admitted to the existence of carbon dioxide following the release of the new U.N. Global Environment Outlook this October.
[…]
Because carbon dioxide, which was first described by 17th-century Flemish physician Jan Baptista van Helmont as a gas he referred to as “spiritus silvestre,” has long been denied by the Bush administration, the president’s speech was widely hailed as a victory for advocates of empirically established scientific fact.
[…]
Many of those whom Bush has long considered to be his most loyal followers, however, have expressed disappointment with the development.
“There is nothing about any ‘carbon dioxide’ in the Bible,” said Rev. Luke Hatfield of Christchurch Ministries in Topeka, KS. “What’s next? Claims that so-called ‘fossil’ fuels come from mythical creatures like dinosaurs? This has been a sad step backward for our nation.” [Bush Acknowledges Existence Of Carbon Dioxide. The Onion. December 21 2007]
I froze for a moment when I saw a short article on Tony Pua today:
KUALA LUMPUR: In February, 35-year-old self-made Internet millionaire Tony Pua made news when he sold his Singapore Stock Exchange listed company for a full-time career in opposition politics.
Pua is a well-known name in the e-commerce industry, where his string of credentials include his being the youngest founder-CEO to have listed a company in Singapore.
But a 2005 Ernst and Young audit report recently revealed that the company, Cyber Village Sdn Bhd, may be running into difficulties, and Pua’s reputation as a corporate whizz kid, which resulted in the DAP appointing him economic adviser to secretary-general Lim Guan Eng, has been called into question. [Doubts over DAP’s economic adviser. New Straits Times. December 22 2007]
There is a little storm going on and I had somewhat contributed to it by making a comment somewhere over the internet of which Jed has taken the liberty to reproduce to support her points. The comment is about how Tony Pua is not an economist. I stand by that statement but I need make myself clear: I wrote it in a matter of fact manner. It does not in whatsoever way indicate my opinion on his management or entrepreneurship skill. Or even his ability to advise on economic matters. Indeed, anybody with a good understanding of economics would be able to advise a layperson. On top of that, a good economist may not be a good businessman, vice versa. A businessman or entrepreneur need not be a economist either, vice versa. Economics after all, is larger than the realm of business.
Regardless, he is not an economist. He qualification does not merit such honor and I have not heard him claiming to be as such either. So, I do not understand why people are insisting that Mr. Pua is an economist, or why the fact that Mr. Pua is not an economist is an issue at all.
Now, who is an economist? What does one need to do to become an economist?
To answer that, I leave you with an entry at the Free Exchange, a blog at The Economist:
WHAT exactly qualifies someone to refer to himself or herself as an economist? Having suffered through many years of graduate school, I, like many others with my training, consider someone an economist only if they too have received a PhD in the subject. I can rationalise this by believing I received special and select training; privy to the secrets of the trade imparted to me by my advisor who, in turn, also learned from the great masters. My take on the economy reeks of the university I attended and the professors with whom I worked. But then, someone, like former colleague Megan McArdle, comes along with no graduate economics work, but a terrific understanding of the field.
To refer to oneself as a medical doctor or be a member of the American Medical Association there exists clear education requirements. This prevents people from taking medical advice from someone unqualified and inflicting harm upon them. No such conditions are required to be called an economist or join the American Economic Association. This results in people who enjoy thinking about the economy, but may lack even undergraduate understanding of the field, representing themselves as experts on issues pertaining to the labour market, trade, and development. Often you have to do some digging to find out they are actually … sociologists.
The years of graduate-school seminars and rigorous mathematical training empowers PhD economists to converse with each other in a language all our own. This allows us to continue to believe that our years of education were worthwhile because we can recognize each other and sneer at the impostors. In the mean time, the rest of the world takes thoughtful advice and opinions from people who sometimes, while not having our illustrious pedigree, also have some very good ideas—and sometimes better ones. [What makes an economist? Free Exchange. October 2 2007]
Personally, unless someone is a practicing economist, I would only recognize someone as an economist if he has at least a Master’s in the field. A mere undergraduate degree does not qualify one as an economist. But to call someone with an unfocused degree such as PPE as an economist, to me, is an insult to those that have actually worked their way through the field.