Categories
Economics

[1513] Of winners need not compensate losers

Steven Landsburg:

All economists know that when American jobs are outsourced, Americans as a group are net winners. What we lose through lower wages is more than offset by what we gain through lower prices. In other words, the winners can more than afford to compensate the losers. Does that mean they ought to? Does it create a moral mandate for the taxpayer-subsidized retraining programs proposed by Mr. McCain and Mr. Romney?

[…]

One way to think about that is to ask what your moral instincts tell you in analogous situations. Suppose, after years of buying shampoo at your local pharmacy, you discover you can order the same shampoo for less money on the Web. Do you have an obligation to compensate your pharmacist? If you move to a cheaper apartment, should you compensate your landlord? When you eat at McDonald’s, should you compensate the owners of the diner next door? Public policy should not be designed to advance moral instincts that we all reject every day of our lives.

[…]

Bullying and protectionism have a lot in common. They both use force (either directly or through the power of the law) to enrich someone else at your involuntary expense. If you’re forced to pay $20 an hour to an American for goods you could have bought from a Mexican for $5 an hour, you’re being extorted. When a free trade agreement allows you to buy from the Mexican after all, rejoice in your liberation — even if Mr. McCain, Mr. Romney and the rest of the presidential candidates don’t want you to. [What to Expect When You’re Free Trading. Steven Landsburg. NYT. January 16 2008]

Categories
Books, essays and others

[1512] Of a time for a tiger

I thought the Malayan Trilogy by Anthony Burgess was still banned in Malaysia and so I stopped looking for it. Very unlike the effort, my interest in the novel did not die out and when I found out that Sharon, along with Malay College Old Boys’ Association, said it was time for a Tiger, I wasted no time to shoot her an email for a spot in that function. Two weeks later, when the time finally came, I found myself staring at a pile of The Malayan Trilogy!

A pile, I tell you!

“But aren’t those banned?” I asked myself in shocked. Ignoring my promise to have North’s as the first book to join my collection in 2008, I hastily grabbed my wallet and enthusiastically paid the scruffy looking old boy behind the counter.

Inside the hall, I spotted several familiar characters. It was a MCOBA event after all. A. Samad Said was there too though I am unsure how does he relate to the Malay College.

But I did not know anybody personally. Or least, I doubt they would remember me. They were old, old boys anyway. Conversation with them would not have gone far and it would have been awkward. So, I sat alone patiently while chewing some kuih and drinking watermelon juice (Was it watermelon?).

I must have looked sad because Sharon came over to me and invited me to her table which was full of people. In my mind, did I look that sad?

I almost protested, asserting that I was enjoying a company of cheerful imaginary friends. But she insisted and confidently picked my drink in effort to make me accept her offer. I was hard to refuse and I moved over to her table.

At that table, a face looked way too familiar. It was not until he introduced himself as Amir did I realized that he was Amir Muhammad. Rob Spence, the speaker of the evening, was at the same table too. Truly, conversation of the table had one theme: books. When I cracked an economics joke, trying the steer the conversational wheel away from what seemed to me obscure books, it backfired. Everybody only gave me pitiful smiles.

And so, I kept quiet, keeping to typical conversation like what do you do, where are you from and other lame things. After what seemed like eternity, the event began.

While Sharon was introducing the guest of the evening, she told the audience that the ban on the book was removed after it was stealthily banned by Malaysian authority in 2007 due to noises made over the local blogosphere and she was part of the campaign. She received a applause for that. As a libertarian, I have no choice but to join the clapping.

It was a good evening. Dr. Rob Spence gave an entertaining primer on Burgess and laughter filled the hall countless of times. I do not remember a lot of what Dr. Spence said but I remember how loud I laughed when he told the audience that Burgess had the cheek to write a book and then assumed another pseudonym to review his own book and gave it high marks. That would have looked bad on a lot of people but with Burgess, it was just hilarious. Burgess’ encounter with the Duke of Edinburgh was another funny story.

What was equally entertaining were anecdotes told by various students of Burgess themselves! It was incredible to listen to individuals that knew Burgess, or Mr. Wilson as they referred to him, personally. As these old boys recalled their days in Kuala Kangsar, laughter filled the hall once again, again and again. At times, I could not breathe because of too much laughing. I was grasping for air, really!

After all was done, I thought I saw Michelle Gunaselan, a co-contributor at Bolehland. I wanted to sat hi but it was already late and I had to go to work the next day. So, I shook some hands and bid farewell.

Before I went to bed, I took a peek at A Time For A Tiger and now, I have another reason to finish up Sophie’s World fast!

Categories
Politics & government

[1511] Of Ron Paul outperforms Giuliani again!

Ron Paul has outdone Giuliani yet again. This time, it is in Michigan!

Fair use. Copyrights by NYT.

It is good to remember that Michigan primaries is more important to the Republicans than to the Democrats. Indeed, unless the penalty on Michigan is removed, Clinton’s win is practically worthless. And it is good to note that Wastenaw, the country which Ann Arbor is situated in, is one of two counties that refuse to commit to anybody (read, Clinton), probably in protest of the penalty imposed on Michigan.

For the Republicans, three different candidates — Huckabee, McCain and Romney — have won three different primaries.

Categories
Humor

[1510] Of how is Ron Paul?

Heh:

Fair use. xkcd. Copyrights by Randall Munroe.

It describes my life.

Categories
Economics Politics & government

[1509] Of a rational world with perfect information makes fuel prices hike irrelevant

There is strong expectation that fuel prices will increase after the expected upcoming general election and the impetus for such expectation is clear. The Malaysian government’s no-hike guarantee lapsed as 2007 regressed into history while crude oil prices have increased significantly since the last hike took place.[1] Meanwhile, prices hike is a very unpopular move[2] and it can be disastrous for any incumbent facing an election. While the reasoning does make sense, it somehow reminds me of the Ricardian equivalence. Indeed, I am inclined to say that given strong expectation of a hike, it does not matter when the hike will take place. In other words, assuming rational individuals with perfect information, fuel prices hike is irrelevant to the result of the expected Malaysian election.

First of all, while I mentioned Ricardian equivalence, the economic theory has only a hint of relevance to the issue at hand. I will not go into the theory in great detail but somewhere along its rationale, the concept suggests that it does not matter when the state raises funds through one-time taxation or debt.[3] The effect will be the same with only one exception: timing difference. This is because individuals accommodate their expectation and shape their behavior accordingly. In either case, between raising debt or rising tax, individuals changes their saving and spending levels to make their lives less painful especially given the eventuality of taxation in the scenario. This is where the concept influences my thought on how fuel prices hike affects Malaysian election.

Honestly, if people greatly suspect that fuel prices hike will follow the election in the tradition of fatalism, assuming the incumbent stays in power, does it matter when the hike will occur?

There is a speeding train running on an unfinished track leading to a horrifying large canyon with no chance of halting the train. You know that the train will be at the bottom of the canyon within the next few minutes. Assuming you actually care for self-preservation, does it matter when you should jump off the train as long as you do not end up at the bottom of the gorge with your face rearranged?

The nature of fatalism is that it is unavoidable and one might as well accept it. Through interaction with a lot of people, I have the perception that they embrace fatalism as far as the fuel prices hike is concerned. There is a clear resignation that nothing could be done about it among them. I have to admit though that I am one of those fatalists and actually support a hike. In fact, I advocate taxation along with floating prices arrangement but that is another issue altogether.

Alas, not all of us are privy to complete information regarding the hike. On top of that, not all of us are a fatalist, either by ignorance or special knowledge. In an imperfect world unfortunately, fuel prices hike will affect the election to a certain degree.

While the conclusion may look like mere mental masturbation and irrelevant to the real world, it does inform policymakers, or rather, the incumbents on how to manage the general public expectation to the incumbents’ benefit, given belief in fatalism and imperfect information. I will share some thought on the matter later.

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved

[1] — KUALA LUMPUR, Nov 5 (Bernama) — The government has reiterated several times that there would be no increase in the price of oil or gas products for the year 2007.

But the reprieve is expected not to last long as we enter the new year and as global fuel prices continued to surge.

Oil prices added nearly US$12 a barrel since the start of October and reached US$93.80 (about RM313) a barrel last Monday (Oct 30) and US$96.24 (about RM321) on Nov 1. Some reports have also mentioned that oil prices could break the US$100 mark if risk factors influencing the sharp rise are to continue. [Bracing For Another Price Hike For Fuel Products. Bernama. Extracted November 5 2007]

[2] — As expected, Malaysians reacted with shock, frustration and anger to having to pay 30 sen more for every litre of petrol and diesel.

Unexpected was the ferocity of sentiment on the ground a day after the biggest single petrol price hike. The common man, already feeling the pinch of the rising cost of living, spewed a litany of complaints and grouses. Consumer groups and trade unions warned the fuel price hike would set off a chain reaction across the board. [Price hike pain for RM4.4b gain. New Straits Times. March 1 2006]

[3] — See Wikipedia for more on Ricardian equivalence.