The bailout

Here’s the latest news on the development from Forbes. Both congress and senate seem to be dragging their feet.

And I think that’s a good thing. I’ve decided that there is probably more of a libertarian in me than I’d thought. I read through Paulson’s plan when it was first launched, long and dead-boring as it was. And I just couldn’t agree with the man. I haven’t read Dodd‘s counter plan, but had it explained here.

Here’s a couple of good quotes that pretty much sum up my feelings on the matter:

Tyler Cowen, professor of economics and prominent writer, explains the difference between the two plans:

Think of a barrel of apples, some good, some less good.  To oversimplify, the Paulson plan has the government buy some of the bad apples.  The Dodd plan has the government buy a 20 percent share in the barrel.  In both cases government buys something.

He points to this letter signed by a host of economists:

As economists, we want to express to Congress our great concern for the plan proposed by Treasury Secretary Paulson to deal with the financial crisis. We are well aware of the difficulty of the current financial situation and we agree with the need for bold action to ensure that the financial system continues to function. We see three fatal pitfalls in the currently proposed plan:

1) Its fairness. The plan is a subsidy to investors at taxpayers’ expense. Investors who took risks to earn profits must also bear the losses.  Not every business failure carries systemic risk. The government can ensure a well-functioning financial industry, able to make new loans to creditworthy borrowers, without bailing out particular investors and institutions whose choices proved unwise.

2) Its ambiguity. Neither the mission of the new agency nor its oversight are clear. If  taxpayers are to buy illiquid and opaque assets from troubled sellers, the terms, occasions, and methods of such purchases must be crystal clear ahead of time and carefully monitored afterwards.

3) Its long-term effects.  If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, America’s dynamic and innovative private capital markets have brought the nation unparalleled prosperity.  Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted.

For these reasons we ask Congress not to rush, to hold appropriate hearings, and to carefully consider the right course of action, and to wisely determine the future of the financial industry and the U.S. economy for years to come.
 

In today’s New York Times there are several good articles and an interesting op-ed. The Economix blog, economy writer Vikas Bajaj‘s very informative piece “Plan’s mystery (…)”

And there’s another thing that I can’t help thinking about. What about the US’ economy in general? If this bail-out goes through, half the American economy will be based on loans in foreign currency. Most of it in yuan (Chinese money). Is that better than having some banks and some mortgage brokers go under?

Here’s a quote from BBC:

Ballooning state debt: The plan would swell the budget deficit, which could fuel inflation, economists warn (Mr Paulson has asked to raise state borrowing to $11.3 trillion, from $10.6 trillion).

A picture of Meg Ryan from The Women? Oh no! No pictures of face-lifted women on my blog. So here’s cute George. Picture borrowed from Styletraxx.

OK, some of you would probably much rather know what I thought of the film The Women, which I saw yesterday. Well, it stinks! I remember being pleasantly surprised by The Devil Wears Prada, which I watched on one of the long-hauls on our trip. Entertaining, funny and with a bit of bite. This one was/had neither. And tooooo looooong! My fingers were literally cutting through the air in some scenes… So, don’t go there. But I saw trailers for two films that I’m longing to see: Brideshead Revisited (oh, how we swooned in front of the TV, when the series was shown in the 80’s!). And the new Coen Brothers film. I’ve seen all their films and I just looove them… and George Clooney ;-)

PS: You’ll want to be wary of the above Wikipedia links (economy). All the articles are highly controversial. So – if you want to go in-depth with any of this, seek other sources as well.

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24 hours

Sarah Palin is meeting how many? foreign leaders in 24 hours? I forget. And I suspect she will too. Very quickly.

How is it possible in a democracy to keep a candidate to such an important job away from the press? I do believe everybody would find it quite OK, if she doesn’t know the name of the president of Belgium or whatever. But in one of two interviews (one on one) she’s given, she didn’t know what the Bush Doctrine is? And I remember that her “boss” McCain named the German chancellor Vladimir Putin… How can the Americans choose to vote for her, when they haven’t even heard her answer some of the questions, which must surely be on their minds?

Anyway, I don’t really have time to elaborate and I’m sure you’d rather I didn’t, so here are links to more qualified deliberations elsewhere: Washington PostInternational Herald Tribune, The Times.

I’ve read a lot about the bailing out of banks and other financial institutions lately. It is very difficult to form an opinion! But I think I’m getting there and tomorrow I’ll let you in on my thoughts!

But now I’m off to the movies with a group of other women (neighbours) to see – The Women. It’s got horrible reviews and it looks more than a little silly. But I’m sure we’ll have a good laugh.

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How to…

I think I read about this wonderful site in The Times, but can’t be sure, it’s a while ago.  Go spend some time there. Check the film about sleeping comfortably with your partner. And to the new (or old as it is) owners of Iphones there are also helpful films. Send a link to the people you know who claim they can’t cook.

And – speaking of food: What did you have for dinner tonight? Anything interesting? Wholesome? Satisfactory? Not? Well, I did for once. That’s the awful thing about holidays. Either you eat out expensively and it is (or at least should be) enjoyable. Or you eat out inexpensively and it is rarely enjoyable, rarely healthy, rarely anything other than filling! Or you make something quickly at home, because it’s the holidays and you can’t be bothered to cook. Or at least that’s how it is for me. And it’s stupid really, because when else do you have this much time to cook a wonderful meal?

It can’t be sushi every day…

Back to what we had for dinner: Couscous mixed with lightly fried vegetables, sundried tomatoes, apricots, pinenuts and coriander. Fried scallops on top. Quickly made, tasted lovely and there’s more in the fridge. Why is it that I don’t pull myself together and make something simple yet wholesome like that more often? Too frequently I fall back to the good old meat, potatoes & 2 veg. Fine. But BORING and often too expensive. Tomorrow night a friend is coming for dinner, so I’ll cook a proper dinner. Will report back to you…

Here’s a couple of websites I go to, when I’m drained of inspiration but still haven’t given up: Epicurious, I think the biggest on the web. They have a section called Quick & Easy. Good Housekeeping and Sainsbury’s are behind Love your Leftovers. Quite good! Then there’s the Recipe of the Day from the New York Times. But that’s not exactly for your Monday night with the family. Good inspiration though! And I can recommend How to Cook like your Grandmother. Fabulous, when the elderly relatives come for dinner. Very untrendy and ever so American is Every Day with Rachel Ray – 30 minutes recipes. But they do work and they do take 30 minutes to prepare.

Finally a little jab about the credit crunch. Oh, I do feel sorry for the young families who can’t get a mortgage. And even more so for those who got one, but can’t renew it. And yes, we can also feel the rise of the petrol prices and food prices. But dear friends – relax a little. Unemployment rates are not skyrocketing, inflation is not exactly worrying and it’s not like the banks are rolling over in death cramps. So why not just take the opportunity to ask ourselves an extra time before we buy anything, whether it’s really something we need or which will make us truly happier? And I think I’ll start buying groceries weekly at Sainsbury’s or Tesco’s and have them delivered. That way I have to plan meals better and will use less petrol.

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An evening traversing the World Wide Web

This picture of a very impressive hydrangea at Nyman’s in East Sussex has absolutely nothing to do with the rest of this post. I just had to show it to you, it’s so beautiful!

I have almost come to a point where I don’t want to come across any more interesting blogs. But unless I stop reading blogs, I’ll inevitably come across new and interesting ones. Like this one, named Interfluidity. The post that Marginal Revolution brought to my attention is about something I’d never heard of, but at least can understand, the paradox of thrift. Quite a brilliant piece on what happens when there’s CRISIS written all over the economy.

Marginal Revolution also reminds me of something I also thought of earlier this week. The Amazon Kindle looks more and more interesting. I’ve dismissed all earlier electronic bookreaders as just not coming anywhere near the real thing in comfort and convenience. This one just may be up there with good old paper and print. It would save us from having to buy a bigger house in a couple of years…

On a Danish website I found a solution to a Facebook problem. When you’ve just added a new friend, the feature “suggest friends” pops up and lets you suggest some of your “old” friends to your new friend. But next time you log on to your new friend’s page, this feature is nowhere to be seen – or found. However, the banal and rather old-style solution is to go to the URL and then just write “&suggestfriends” after the address and press Enter – voila! In the same ballgame I’ve found (through my very own search, no less) what may be my salvation. I’ve been struggling with updating this WordPress blog to the newest version, which will let me do a lot of things that I can’t do now. But I’ve come across several obstacles and have had to give it up when I’ve tried it. It has become almost traumatic… It’s a video which explains to dummies like me how it’s done. You’ll be able to see for yourself whether it works. Don’t expect miracles in the next few weeks though – too much holiday stuff going on. But then!

On the subject of happiness, Jonathan Mead wrote this interesting piece on Pick the Brain. I do think he could have tipped his hat to Daniel Gilbert, my happiness guru, but he doesn’t. He’s got his own blog, which also looks like it could be worthy of the occasional visit.

On the news I found a funny little story about “the first computer” – from 2.100 years ago. It apparently had several ways to compute time, one of which was Olympic Time, i.e. every fourth year. Read more on BBC Online and on the project’s homepage.

And in the Independent I read that Danes are only half as fat as the British. No, that’s doing terrible things to statistics, which I’ve promised myself never to dabble in, since I saw this video on TED. Anyway, there are 18% Brits who are obese, but only 9% Danes, or so the accompanying statistics claim. So get it together, my Danish friends, and stop eating c-r-a-p food while you can! I had actually wondered several times if there weren’t more heavily overweight people over here than back home. And sadly, I was right. 18% obese people – that’s a lot!

Oh yes, and I’ve forgotten to bring you this excellent version of The Story of the Internet and the World Wide Web. It’s from Vanity Fair.

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The Gift Economy?

No matter how hard I try, I never seem to be quite up to speed with what’s going on out there in the world. Today I read about a phenomenon, which I’ve occasionally been arguing for (to a degree), but didn’t even know had a name… Well, it does have a name: The Gift Economy (Wikipedia article disputed, but still quite informative). First book on subject written more than 20 years ago :-(

The source of all this new information is a blog I’ve been following for quite a while. It’s called

This Blog Sits at the

Intersection of Anthropology and Economics

which is an unusually accurate title for a blog.

What he uses as an example is a rapper called Lil’ Wayne from New Orleans. Apparently he tipped Coldplay off No. 1 in the American charts. And I’ve never heard of him… Anyway, the interesting bit is that Lil’ Wayne makes practically everything he ever makes freely available on the Internet – in every shape or form you can imagine. So, when his album was recently released, could you then expect it to sell? Well, I would. But I know a lot of people who wouldn’t!

Gift Economy is based on the thought that “What Comes Around Gets Around”. Where I’m certain that variations on this idea can work very well for most artistic products, I’m not so sure about other stuff. As the above blogger muses, will somebody give him the aluminium siding that he so wants? And if somebody did, wouldn’t that somebody go bankrupt very soon? Or would other people start giving him back stuff (he wants and needs)  out of sheer gratitude? I know people who would and people who wouldn’t. Don’t know which kind there are most of out there!

But oh, can I just love the idea of it for a little while!

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Links

Now, what kind of idiot does a thing like this? Thank you to Capac for the pointer.

I’m always going on about TED (Technology Entertainment Design). As the happy owner of an Iphone I have taken podcasts to a higher level and sit on buses, trains and airplanes etc. and LEARN things in a very entertaining way by watching video-podcasts from TED. If you still haven’t taken my hint and tried to watch a TED video, here’s your chance of watching some of the very best ones, picked out by really brainy people. The theme of TED is “Ideas are Everything”. And what the speakers have in common is that they have one or more original idea(s). Some speakers are world famous, some “only” famous within their field. Some of them aren’t famous at all before they appear on TED!

A spinoff of TED is this lovely online shop based in San Francisco with messenger bags made of discarded plastic bottles. I want one!

The Long Now Blog links to this very funny post about the messages that we, Earth, have sent into space since we were able to go there. It’s not uplifting reading, but it’s so funny! I’m going to keep an eye on that guy.

The Times (and most all other media) has the story this morning of an American court ruling against Google/Youtube. Viacom has sued for infringment of their copyright. Oh, I’m tired of hearing the big media companies going on about Artists’ Rights. It’s not really the artists’ rights they care about, but their own sources of income. And very often they – mysteriously – are biting the hand that feeds them. For instance, the many, many clips in Youtube from Britain’s got Talent and all the other similar shows. Do those clips give the shows more viewers or less viewers? More interest or less interest? Your guess is as good as mine… It really is worrying that Viacom can look into the viewing habits of every single Youtube user and maybe even access their IP-address. In a statement Viacom says that they are not going to do that, but only time will show. Reading about this led me on to this honourable organisation, the Electronic Frontier Foundation. How glad I am that people have the time and energy to found and run such organisations. It’s for the benefit of us all. More on this issue from Jeff Jarvis.

Also from the Long Now Blog a pointer to an article (disguised as a book review) in the New York Review of Books about global warming by British physicist and author Freeman Dyson (what I would not give to be as clearminded at the age of 84!!!). Before you roll your eyes and move on, let me tell you that this article is about the whole issue. The arguments for and against whether global warming is a serious problem or not, the economic aspects of all the different paths we could take and a very interesting finale about Environmentalism as a new religion. If you’re interested in this and want to read something that is truly unbiased, then try this. It’s not exactly an easy read and I will not claim to have understood all of it. But I understand lots more now than I did before…

The News is now Public ( a site dedicated to the publishing of news ignored or played down by other media) tells about Patrick Waller, the 31st innocent man freed by DNA in the state of Texas. The state of Texas apparently has a double record in the US. It’s the state where the most sentenced have later been found innocent based  on DNA and other evidence. And it’s the state with the highest rate of executions. That’s bone-chilling! CNN is the source of the story. An organisation called the Innocence Project are fronting and financing many of these cases. God Bless them!

As many of you will know, I’m an “Apple Person”. I love all things Apple and have much more of that “I Can’t Live Without It”-feeling in the Apple Store than in any department store. But there are things that aggravate me with Apple too. And mostly that has to do with the copyright thing. I absolutely detest that I can’t do with my own paid for CD’s and downloads exactly as I please. That absolutely INFURIATES me. And reading that I couldn’t watch Netflix films on my Mac if I so chose, infuriates me further. Give me my rights back! Why are my rights influenced by what platform I’ve chosen? Grrrr…

Jabberwock, an Indian blog, reviews the debut novel by Mohammed Hanif, which I’ve also read good things about elsewhere. He tells about the similarities to a book I read a long time ago and really, really liked: Mario Vargas Llosa‘s The Feast of the Goat. Mr. Hanif himself acknowledges the inspiration from Llosa. If you’ve never read anything by Llosa, he can be recommended as good – and very entertaining – summer reading. I’ve added the Exploding Mangoes to my Amazon wish list.

Oh, just realising I’ve been going on like this for hours and you’ve probably left this page a long time ago. Let this then be the last link. A funny post by Megan McArdle on The Atlantic about the demise of the SUV. I was never fond of SUVs in the first place, them being petrol-consuming and even more dangerous to pedestrians and bicyclists than other cars, so of course I love her little piece. Have a laugh over some of the comments as well.

No, here’s the last bit. On a very nice social outing with neighbours here in our convent, one person collected money for a “kitty”, for drinks at the pub. I did know what a kitty was, but hadn’t heard the word in many years, not having lived in England before. Asking all these knowledgeable and well educated people about the origin of the word “kitty”, they all drew a blank. But view possible explanations here, here and here.

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What to do about city slum

Upon surfing the news circuit, I stumbled upon a really interesting article on CNN. It’s about the positive sides of city slums, favelas, shantytowns, or whatever they’re called in different parts of the world. It’s really, really interesting, and, honestly, I didn’t have a clue about this.  Do read it all the way to the end, if you can find the time. Here’s a little appetizer:

Historically, Brand said, squatter cities have always been areas of economic expansion; within them there is virtually no unemployment, and their inhabitants are constantly striving to lift themselves out of destitution, he said.

“[Slums] are generating wealth the way cities have always done,” Brand said.

In India, almost 20 percent of the GDP comes from Mumbai, where half the city’s 12 million residents live in slums, Brand said. And even though many slum dwellers work in the informal economy, the official economy benefts as workers accumulate income and can afford to buy more goods and services outside their shadow neighborhoods.

In the article an organization is mentioned, which I’ve never heard of either. The Long Now Foundation. It’s based in California (where else?) and its focus is on long term planning instead of the usual way politicians and administrators do it, till the end of their term… The website looks incredibly interesting and I’ve added the blog to my rounds. Which means you might here more about it at a later stage ;-)

Furthermore, the article mentions a journalist, Robert Neuwirth, who has lived in different shantytowns for two years and wrote a book about it. Here’s a link to a talk he gave to the TED conference, here’s to his blog and here’s to buy the book

Photo googled and found here.

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Food for thought

I’ve recently added a new blog to my “daily rounds” (or weekly, it depends…). It’s on The Atlantic‘s website by Megan McArdle. This woman can write. And, tada, she’s not a journalist (and not an economist either)!

Her blog is supposedly an economy blog, but if that’s economy I want to be an economist too. Actually, economists seem to be a lot more fun than I’d ever imagined. As I’ve previously let you in on, I also follow economy blog no. 1, the Marginal Revolution blog. Very often the posts are not about economics at all, quite often they are about economy but in such an interesting context that it doesn’t seem that way. And some times they are about hardcore economics and I just skip them…

But back to Megan. The post that made me sit down and write this is about racial issues. But it’s also about litterature. And philosophy. And it is so beautifully written – such mastery of language! An example:

I see the two communities looking suspiciously at each other and saying “Once you have perfected yourself, then I will love you as myself.” But this will not work. The very act of watching the other, at a distance, for signs of change creates the problem we want to solve.

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No Europeans/Americans seem to be suffering…

… so I keep my money in my pocket; or what else is the reason for the missing donations towards the disaster in Burma???

I can see that the excuse is that the regime isn’t letting the help through. And of course that’s horrible. But some of the international aid organisations like Save the Children are already inside Burma and they are litterally pleading for more donations. So why don’t you donate some of your surplus right now!

I was thinking about the not-exactly-necessary things I’ve bought within the last couple of weeks. I won’t tell you all of it, because, frankly, it’s pretty embarrassing, but I’ve bought some handkies for my husband, a wall calendar to keep up with school holidays etc., white tea to satisfy my spoilt tastebuds, a cute shirt for Dane, Vanity Fair and eh, probably a lot more. So donating a few pounds towards people in real need hasn’t exactly bankrupted me! Nor will it bankrupt you, I suspect…

The next issue of course is what to do about that awful regime down there?!? Handing Ms. Aung San Suu Kyi the Nobel peace prize didn’t exactly do the trick, did it? And the international pressure seems to be making no impression on the generals whatsoever. Small wonder, when the bulk of “international pressure” seems to be directed towards the “evil regimes” in the middle east (and then there’s North Korea). China, who is the Burmese regime’s primary protector, is probably at the core of the problem here. Because the world leaders seem to be more than reluctant to put any kind of pressure on the Chinese, no matter if it’s about their oppressive regime at home or the protection of others’. Did you know that a good deal of the war in Iraq is actually financed by China? Well, it is, because China is lending money to the US on an scale hitherto unheard of. Read here and here. And now China has to deal with it’s own catastrophe, the earthquake. The timing couldn’t be worse!

On a favourite American news site of mine, Slate, they argue for a REAL “coalition of the willing”. Namely countries who are willing to intervene on behalf of the Burmese people against their leaders. France & Germany – have another go, please! And Britain – join a coalition that’ll do the world some good for a change. That goes for you too, Denmark…

Pictures from the New York Times

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A basic belief shattered…

or is it? I’ve always believed firmly in the so-called Easterlin paradox (although never really knowing what it was called). It’s an economic term named after the man who first wrote about it. (Some) statistics can be read in a way that indicates that, until you’ve reached a basic level of economic security, you get happier the more money you earn. The paradox being that once your finances are in such a state that you have a roof over your head, clothes on your back and food in your mouth (and healthcare and education possibilities for your children), your level of happiness evens out no matter how much money you earn after that.

This dogma is now being challenged by a couple of young American economists. According to an article in the New York Times their data is fairly substantiated. But read it for yourselves, I can’t explain it half as well as that excellent journalist who wrote the story.

First read it on a favourite blog of mine, Marginal Revolution. On New York Times’ Freakonomics blogs there’s more.

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