If this report here ever came to pass, then the full logic of war escalation in Afghanistan, a la Vietnam, is in place.
With more troops sent, there will be pressure to send even more when the goings get tough. The military will predictably ask for even more to get the job "done".
Withdrawal in the face of more casualties will be tagged by the Hawks back home as "traitorous" and "cowardly".
Obama, like LBJ, will then be forced to escalate more. Dollar would go way down, gold way up. This would be a rerun of a bad and familiar movie with a predictable and disastrous ending. Watch this space.
Tuesday, November 10, 2009
Monday, November 09, 2009
Inflation Expectations & No Free Lunch
There can be no better example of the well-known axiom about "no free lunch" in this world than the inevitable consequences of the bailout of Wall Street. That bailout was itself a "no free lunch" consequence of years of slap dash financial regulations plus fighting a war without asking the American people to pay for the deficits.
Oh yes, the deficits themselves were a "no free lunch" consequence of Bush's tax cuts. Those tax cuts were supposed to destroy once and all the axiom that one needed to pay for a lunch.
There are also political "no free lunch" consequences of a bailout plan hatched by Hank Paulson and later expanded by Geither/Summers to tilt towards helping predominantly a few Wall Street firms run by their pals.
Main Street will one day exact a political price on the Obama administration for a blatantly unfair bailout plan though there was no argument that a bailout of sorts was needed to pop up the sinking economy. The anger is not about whether, but about how.
Right now, all that printing of money that costs the banks next to nothing is having its "no free lunch" consequence of increased inflation expectations around the world ( read this here) even though unemployment remains sky high. The highest since the Great Depression in the US which is not officially over 10% but unofficially over 20% counting those who are "hidden".
These inflation expectations are behind the spectacular recovery in property prices in China and Hong Kong whose currencies are dollar based; the recovery in share prices, in oil and in gold.
Is this justified? I think so.
Oh yes, the deficits themselves were a "no free lunch" consequence of Bush's tax cuts. Those tax cuts were supposed to destroy once and all the axiom that one needed to pay for a lunch.
There are also political "no free lunch" consequences of a bailout plan hatched by Hank Paulson and later expanded by Geither/Summers to tilt towards helping predominantly a few Wall Street firms run by their pals.
Main Street will one day exact a political price on the Obama administration for a blatantly unfair bailout plan though there was no argument that a bailout of sorts was needed to pop up the sinking economy. The anger is not about whether, but about how.
Right now, all that printing of money that costs the banks next to nothing is having its "no free lunch" consequence of increased inflation expectations around the world ( read this here) even though unemployment remains sky high. The highest since the Great Depression in the US which is not officially over 10% but unofficially over 20% counting those who are "hidden".
These inflation expectations are behind the spectacular recovery in property prices in China and Hong Kong whose currencies are dollar based; the recovery in share prices, in oil and in gold.
Is this justified? I think so.
Sunday, November 08, 2009
With Friends like these, who needs enemies?
Precision air strikes, as in video games, were considered "cost effective" even back in the days of the Vietnam War. Minimum casualties on "our side", maximum on their side. Did it work then? No.
Now, those who don't want to learn from history are repeating the same cost effective war making. One inevitable consequence is alienating those you want to be on "our side".
If air strikes can kill your own people, imagine what air strikes do to those who are not your own comrades?
All reports indicate Afghan civilians are at least as fearful and resentful of US induced "collateral damage" as that of Taliban or Al Qaeda. Read this latest from BBC here.
Now, those who don't want to learn from history are repeating the same cost effective war making. One inevitable consequence is alienating those you want to be on "our side".
If air strikes can kill your own people, imagine what air strikes do to those who are not your own comrades?
All reports indicate Afghan civilians are at least as fearful and resentful of US induced "collateral damage" as that of Taliban or Al Qaeda. Read this latest from BBC here.
Saturday, November 07, 2009
11 best universities in the World -- in pictures!
Rankings are entertaining. Sometimes even informative. But just don't take them too seriously.
This list published by Jiao Tong University in Shanghai, now a much quoted one, at least makes far more sense than the silly one in the Times of London Education Supplement I posted 2 days ago which put Berkeley at the 39th spot. Here Berkeley is ranked number 3 in the world.
I have said before any list that does not put Berkeley as one of the 10 best should immediately be discarded as rubbish. Disclosure -- I am not an alumnus.
Here is the latest top rankings and with visuals!
Two (of many) caveats.
What does "best" really mean besides counting Nobel's and other academic awards won by professors at those universities?
Is comparing Caltech, MIT or Rockefeller, three essentially specialist schools, with full-service universities such as Yale meaningful?
The user-friendly full list is here.
Or you can go straight to the source here. Be warned. That site can be very slow.
This list published by Jiao Tong University in Shanghai, now a much quoted one, at least makes far more sense than the silly one in the Times of London Education Supplement I posted 2 days ago which put Berkeley at the 39th spot. Here Berkeley is ranked number 3 in the world.
I have said before any list that does not put Berkeley as one of the 10 best should immediately be discarded as rubbish. Disclosure -- I am not an alumnus.
Here is the latest top rankings and with visuals!
Two (of many) caveats.
What does "best" really mean besides counting Nobel's and other academic awards won by professors at those universities?
Is comparing Caltech, MIT or Rockefeller, three essentially specialist schools, with full-service universities such as Yale meaningful?
The user-friendly full list is here.
Or you can go straight to the source here. Be warned. That site can be very slow.
Friday, November 06, 2009
The Magic $50,000 mark - 2
A number of anonymous readers objected to my "conclusion" I reached in an earlier blog regarding choosing colleges. In that blog I proposed taking a first cut by looking at a table of the largest endowment per student and then taking a second cut by looking at the quality and suitability to the individual needs.
I clearly did not explain myself well. One commentator said Haverford was on the most expensive list but gave the best financial aids. That's good. We are really talking about two different things.
What happens to a student accepted by Haverford but is not qualified to receive financial aids? His or her parents would have to pay more to send the student to Haverford vs Princeton or Yale assuming all accept the student on identical terms -- no financial aids.
The reason why Yale or Princeton can afford to charge less is precisely their endowment per student is much higher than Haverford.
I am of course assuming the quality of Haverford is as good as that Princeton or Harvard could provide. Some would argue Haverford is better. Others would argue the other way. I am not taking sides. Choosing the "best" college is very individual.
However, on a value for money basis and assuming quality is the same, then clearly Haverford is a more expensive proposition than, say, Princeton.
Unless the potential student absolutely detests Princeton, the campus and the town, and particularly likes Haverford, the campus or the town, or for other reasons unrelated to academic excellence, then if s/he is accepted by both colleges without financial aids, I should think Princeton would be a better deal.
I also used the word "subsidized" in the early blog. That in retrospect was perhaps too ambiguous. Let me clarify.
A typical college in the US does not charge in full what it costs to educate a student. The historical ratio is 3 or 4 to 1. For every $ student pays, the university has to spend 3 or 4 times more. You can verify this by taking a look at a financial statement published by, say, Harvard or Yale or Haverford.
For those less endowed colleges they need to charge more because they don't get a large contribution from their smaller endowments. The richer ones get more income from their endowment to fund the annual budget and can afford to charge less.
It was in that context that I said richer colleges subsidize their students more than poorer ones. I did not mean poor colleges could not or would not find a way to offer a generous package to a particularly talent student.
However, taking the student body as a whole, a larger percentage of students at Haverford I suspect would have to pay more towards their cost than a student at Yale -- again I am assuming both colleges offer the same quality so as not to be side tracked by a whole different debate about who is "better".
All one has to look at is the percentage of tuition in the total college budget.
In general, those who have a larger endowment per student would be able to provide better facilities and better faculty/student counseling.
There are always exceptions.
Haverford is one. But Haverford is, in fact, not a typical small college for its students have access to 3 excellent schools: Bryn Mawr, one of the $50k+, Swathmore (not on the list but has one of the highest endowment per student) and University of Pennsylvania, one of nations' best research institutions. All credits are transferable. All these 3 are excellent schools.
So naming Haverford to knock down my argument was not a very good starting point.
Few colleges on that list over $50,000 a year have that privilege. Despite a lower endowment per student, Haverford enjoys extra benefits due to its affiliations with those other schools.
By the way faculty student ratio at Haverford is 8 to 1 versus 5 to 1 at Princeton which has the highest endowment per student among leading colleges and is not on the list of the most expensive.
The real interesting question is if Haverford, Princeton and Yale - which charge less - all accept an applicant without financial aids, which one is a "better deal" for the parents and the student who must think about how to finance those 4 years in college.
I hope this note clarifies matters.
I clearly did not explain myself well. One commentator said Haverford was on the most expensive list but gave the best financial aids. That's good. We are really talking about two different things.
What happens to a student accepted by Haverford but is not qualified to receive financial aids? His or her parents would have to pay more to send the student to Haverford vs Princeton or Yale assuming all accept the student on identical terms -- no financial aids.
The reason why Yale or Princeton can afford to charge less is precisely their endowment per student is much higher than Haverford.
I am of course assuming the quality of Haverford is as good as that Princeton or Harvard could provide. Some would argue Haverford is better. Others would argue the other way. I am not taking sides. Choosing the "best" college is very individual.
However, on a value for money basis and assuming quality is the same, then clearly Haverford is a more expensive proposition than, say, Princeton.
Unless the potential student absolutely detests Princeton, the campus and the town, and particularly likes Haverford, the campus or the town, or for other reasons unrelated to academic excellence, then if s/he is accepted by both colleges without financial aids, I should think Princeton would be a better deal.
I also used the word "subsidized" in the early blog. That in retrospect was perhaps too ambiguous. Let me clarify.
A typical college in the US does not charge in full what it costs to educate a student. The historical ratio is 3 or 4 to 1. For every $ student pays, the university has to spend 3 or 4 times more. You can verify this by taking a look at a financial statement published by, say, Harvard or Yale or Haverford.
For those less endowed colleges they need to charge more because they don't get a large contribution from their smaller endowments. The richer ones get more income from their endowment to fund the annual budget and can afford to charge less.
It was in that context that I said richer colleges subsidize their students more than poorer ones. I did not mean poor colleges could not or would not find a way to offer a generous package to a particularly talent student.
However, taking the student body as a whole, a larger percentage of students at Haverford I suspect would have to pay more towards their cost than a student at Yale -- again I am assuming both colleges offer the same quality so as not to be side tracked by a whole different debate about who is "better".
All one has to look at is the percentage of tuition in the total college budget.
In general, those who have a larger endowment per student would be able to provide better facilities and better faculty/student counseling.
There are always exceptions.
Haverford is one. But Haverford is, in fact, not a typical small college for its students have access to 3 excellent schools: Bryn Mawr, one of the $50k+, Swathmore (not on the list but has one of the highest endowment per student) and University of Pennsylvania, one of nations' best research institutions. All credits are transferable. All these 3 are excellent schools.
So naming Haverford to knock down my argument was not a very good starting point.
Few colleges on that list over $50,000 a year have that privilege. Despite a lower endowment per student, Haverford enjoys extra benefits due to its affiliations with those other schools.
By the way faculty student ratio at Haverford is 8 to 1 versus 5 to 1 at Princeton which has the highest endowment per student among leading colleges and is not on the list of the most expensive.
The real interesting question is if Haverford, Princeton and Yale - which charge less - all accept an applicant without financial aids, which one is a "better deal" for the parents and the student who must think about how to finance those 4 years in college.
I hope this note clarifies matters.
Global Rankings of Universities -- A joke
Ever since US News & World Report revived its failing business publishing hugely successful annual rankings of US universities, it has been all the rage for papers around the world who have rediscovered the art of selling a me-too product.
The Times of London has been publishing an annual supplement ranking universities on the global basis. And the results are embarrassing.
Why?
Well, anyone who thinks University College in London ranked number 4 is superior to Princeton ranked #8, or Stanford is lesser than Duke and Cornell, or Australian National University is superior to University of Michigan or University of Hong Kong is superior to Kyoto University, a world class university boosting nobel prize winners is a fine candidate to enter a psychiatric ward.
This is not to denigrate UCL, Duke, Cornell etc. They are fine institutions. But hey, ok, rankings are fun unless they are stupid.
Here is the Report.
By the way, any ranking table that does not list University of California, Berkeley as one of the top 10 in the world should be thrown into the shredder rightaway. In this table, it was ranked 39 below Melbourne, Sydney and the Hong Kong University of Science and Technology which has a lifespan of less than 30 years. Unbelievable.
The Times of London has been publishing an annual supplement ranking universities on the global basis. And the results are embarrassing.
Why?
Well, anyone who thinks University College in London ranked number 4 is superior to Princeton ranked #8, or Stanford is lesser than Duke and Cornell, or Australian National University is superior to University of Michigan or University of Hong Kong is superior to Kyoto University, a world class university boosting nobel prize winners is a fine candidate to enter a psychiatric ward.
This is not to denigrate UCL, Duke, Cornell etc. They are fine institutions. But hey, ok, rankings are fun unless they are stupid.
Here is the Report.
By the way, any ranking table that does not list University of California, Berkeley as one of the top 10 in the world should be thrown into the shredder rightaway. In this table, it was ranked 39 below Melbourne, Sydney and the Hong Kong University of Science and Technology which has a lifespan of less than 30 years. Unbelievable.
Thursday, November 05, 2009
J.P. Morgan Bank
JP Morgan used to be one of two or three bluest chip banks in the States that stood for high professional standards where scions of fine families worked for a life time. That was then. This is now. Read this report here and sigh.
Wednesday, November 04, 2009
Let's Call a Spade a Spade, Mr. Friedman!
Outsourcing is Big and is "in". Everybody does it.
Simple economics. If Country A can make the same product, if not better, at a lower price, than in your own country, you move your factories to Country A. Economic patriotism, as is taught in freshman economics, is for the birds.
But when it comes to fighting a war and you are not finding sufficient volunteers, you pay up. It too is called "outsourcing". Remember Blackwater?
This is a "cheaper" outsourcing as well measured in politics, not in $$. Since casualties are not counted as military but as civilian. Since outsourced fighters are not technically soldiers, lots of stuff can be done under the radar.
There is another more important dimension. Outsourced firms on a military contract are not bound by the same military codes of honor, such as the Geneva Conventions governing the conduct of war, especially on how prisoners of war should be treated. Why? Because those firms are technically not military and the fighters are not strictly speaking GIs in uniform.
US historically adhered to Geneva Convention codes. That was then. This is now.
Tom Friedman has written an interesting column here on this subject, but he tried so hard not to utter the M word it is embarrassing.
The word is spelled 'MERCENARIES'.
There was a time when GIs were welcomed in a foreign country by men, women, children and pretty ladies with flowers and open arms. Not any more as mounting "collateral damage" has all but accepted as "normal".
In Iraq and Afghanistan there is a widespread desire for the US soldiers to leave. It is particularly sad that while uniformed solders tend to behave honorably, those who are "contract" soldiers do not often do so. Let's call them for what they are: mercenaries, Tom.
Simple economics. If Country A can make the same product, if not better, at a lower price, than in your own country, you move your factories to Country A. Economic patriotism, as is taught in freshman economics, is for the birds.
But when it comes to fighting a war and you are not finding sufficient volunteers, you pay up. It too is called "outsourcing". Remember Blackwater?
This is a "cheaper" outsourcing as well measured in politics, not in $$. Since casualties are not counted as military but as civilian. Since outsourced fighters are not technically soldiers, lots of stuff can be done under the radar.
There is another more important dimension. Outsourced firms on a military contract are not bound by the same military codes of honor, such as the Geneva Conventions governing the conduct of war, especially on how prisoners of war should be treated. Why? Because those firms are technically not military and the fighters are not strictly speaking GIs in uniform.
US historically adhered to Geneva Convention codes. That was then. This is now.
Tom Friedman has written an interesting column here on this subject, but he tried so hard not to utter the M word it is embarrassing.
The word is spelled 'MERCENARIES'.
There was a time when GIs were welcomed in a foreign country by men, women, children and pretty ladies with flowers and open arms. Not any more as mounting "collateral damage" has all but accepted as "normal".
In Iraq and Afghanistan there is a widespread desire for the US soldiers to leave. It is particularly sad that while uniformed solders tend to behave honorably, those who are "contract" soldiers do not often do so. Let's call them for what they are: mercenaries, Tom.
Tuesday, November 03, 2009
The magic $50,000 mark
Take a look at the following list of colleges in the US. This list of 58 colleges have the dubious honor of charging over $50,000 a year for tuition, room, etc.
The most interesting thing about this list is why some well-known names are NOT on the list.
You would have thought the obvious names such as Harvard, Princeton, MIT, Stanford, Amherst, Williams, Yale, Caltech, would be among them. Why not?
Elementary Doctor. Those who do not charge the most have big endowments per capita. The larger they are, the more the students are subsidized by the colleges.
I posted a blog earlier re how to choose colleges (or boarding schools) after being asked by too many friends with kids. The first cut is to look at those names with the highest endowment per capita. From them, do a second filter taking into consideration other factors: location, academic reputation, facilities, quality of student counseling and the like.
Choosing a college should not be based solely on cost. A Wellesley in its idyllic setting cannot be compared with, say, Barnard in New York City.
However, if money is an issue, then this list can be useful to your selection process.
****
These 58 private colleges and universities published rates for tuition, fees, room, and board totaling $50,000 or more in 2009-10. Last year only five institutions did so.
Source: The College Board's Annual Survey of Colleges 2009
Sarah Lawrence College
$55,788
Landmark College
$53,900
Georgetown U.
$52,161
New York U.
$51,993
George Washington U.
$51,775
Johns Hopkins U.
$51,690
Columbia U.
$51,544
Wesleyan U.
$51,432
Trinity College (Conn.)
$51,400
Washington U. in St. Louis
$51,329
Bates College
$51,300
Vassar College
$51,300
Parsons the New School for Design
$51,270
Carnegie Mellon U.
$51,260
Vanderbilt U.
$51,228
Skidmore College
$51,196
Bard College
$51,180
Harvey Mudd College
$51,137
Connecticut College
$51,115
Tufts U.
$51,088
U. of Chicago
$51,078
Claremont McKenna College
$51,035
Haverford College
$50,975
Boston College
$50,970
Barnard College
$50,969
Colgate U.
$50,940
Bowdoin College
$50,900
Bennington College
$50,860
Eastman School of Music, U. of Rochester
$50,856
Middlebury College
$50,780
Pitzer College
$50,770
U. of Southern California
$50,732
Fordham U.
$50,598
Mount Holyoke College
$50,576
Scripps College
$50,550
Oberlin College
$50,484
Hampshire College
$50,450
Union College (N.Y.)
$50,439
Stevens Institute of Technology
$50,420
Franklin & Marshall College
$50,410
Smith College
$50,380
St. John's College (Md.)
$50,352
Bard College at Simon's Rock
$50,340
Babson College
$50,324
Bucknell U.
$50,320
Colby College
$50,320
Rensselaer Polytechnic Institute
$50,310
Lafayette College
$50,289
Boston U.
$50,288
Hobart and William Smith Colleges
$50,245
Dickinson College
$50,219
Carleton College
$50,205
Tulane U.
$50,190
Northwestern U.
$50,164
Cornell U.
$50,114
Dartmouth College
$50,084
Bryn Mawr College
$50,034
Franklin W. Olin College of Engineering
$50,025
The most interesting thing about this list is why some well-known names are NOT on the list.
You would have thought the obvious names such as Harvard, Princeton, MIT, Stanford, Amherst, Williams, Yale, Caltech, would be among them. Why not?
Elementary Doctor. Those who do not charge the most have big endowments per capita. The larger they are, the more the students are subsidized by the colleges.
I posted a blog earlier re how to choose colleges (or boarding schools) after being asked by too many friends with kids. The first cut is to look at those names with the highest endowment per capita. From them, do a second filter taking into consideration other factors: location, academic reputation, facilities, quality of student counseling and the like.
Choosing a college should not be based solely on cost. A Wellesley in its idyllic setting cannot be compared with, say, Barnard in New York City.
However, if money is an issue, then this list can be useful to your selection process.
****
These 58 private colleges and universities published rates for tuition, fees, room, and board totaling $50,000 or more in 2009-10. Last year only five institutions did so.
Source: The College Board's Annual Survey of Colleges 2009
Sarah Lawrence College
$55,788
Landmark College
$53,900
Georgetown U.
$52,161
New York U.
$51,993
George Washington U.
$51,775
Johns Hopkins U.
$51,690
Columbia U.
$51,544
Wesleyan U.
$51,432
Trinity College (Conn.)
$51,400
Washington U. in St. Louis
$51,329
Bates College
$51,300
Vassar College
$51,300
Parsons the New School for Design
$51,270
Carnegie Mellon U.
$51,260
Vanderbilt U.
$51,228
Skidmore College
$51,196
Bard College
$51,180
Harvey Mudd College
$51,137
Connecticut College
$51,115
Tufts U.
$51,088
U. of Chicago
$51,078
Claremont McKenna College
$51,035
Haverford College
$50,975
Boston College
$50,970
Barnard College
$50,969
Colgate U.
$50,940
Bowdoin College
$50,900
Bennington College
$50,860
Eastman School of Music, U. of Rochester
$50,856
Middlebury College
$50,780
Pitzer College
$50,770
U. of Southern California
$50,732
Fordham U.
$50,598
Mount Holyoke College
$50,576
Scripps College
$50,550
Oberlin College
$50,484
Hampshire College
$50,450
Union College (N.Y.)
$50,439
Stevens Institute of Technology
$50,420
Franklin & Marshall College
$50,410
Smith College
$50,380
St. John's College (Md.)
$50,352
Bard College at Simon's Rock
$50,340
Babson College
$50,324
Bucknell U.
$50,320
Colby College
$50,320
Rensselaer Polytechnic Institute
$50,310
Lafayette College
$50,289
Boston U.
$50,288
Hobart and William Smith Colleges
$50,245
Dickinson College
$50,219
Carleton College
$50,205
Tulane U.
$50,190
Northwestern U.
$50,164
Cornell U.
$50,114
Dartmouth College
$50,084
Bryn Mawr College
$50,034
Franklin W. Olin College of Engineering
$50,025
The Snows of Kilimanjaro
..."Compie turned his head and there, ahead, all he could see, as wide as all the world, great, high, and unbelievably white in the sun, was the square top of Kilimanjaro. And then he knew that there was where he was going"...
It was a passage from one of Hemingway's most famous short stories that was made into a film in 1952 staring Gregory Peck, Susan Hayward and Ava Gardner. Compie was Compton, a character in his story.
What Compie (Hemingway) saw would have looked like this picture taken in 1930:
Hemingway wrote the story in the early 30's though it was published in 1961 in a collection together with other short stories. "Snows", many say, is arguably Hemingway's best short story.
If Hemingway were alive today, he could not have written that passage. Take a look at Mt Kilimanjaro today:
This picture was in today's NY Times here.
The rightwing folks in today's radicalized Republican Party in USA, continue to believe global warming is either yet another sissy Democratic party nonsense or a communist plot -- whichever fits.
It was a passage from one of Hemingway's most famous short stories that was made into a film in 1952 staring Gregory Peck, Susan Hayward and Ava Gardner. Compie was Compton, a character in his story.
What Compie (Hemingway) saw would have looked like this picture taken in 1930:
Hemingway wrote the story in the early 30's though it was published in 1961 in a collection together with other short stories. "Snows", many say, is arguably Hemingway's best short story.
If Hemingway were alive today, he could not have written that passage. Take a look at Mt Kilimanjaro today:
This picture was in today's NY Times here.
The rightwing folks in today's radicalized Republican Party in USA, continue to believe global warming is either yet another sissy Democratic party nonsense or a communist plot -- whichever fits.
If you haven't any charity in your heart, you have the worst kind of heart trouble." Bob Hope
"More and more I come to value charity and love of one's fellow being above everything else... All our lauded technological progress--our very civilization--is like the axe in the hand of the pathological criminal." »
Albert Einstein
So, good for you BradAngie. I will go to your movies more often
http://philanthropy.com/news/?id=10012&pth&utm_source=pt&utm_medium=newsletter&utm_content=lefttop
Albert Einstein
So, good for you BradAngie. I will go to your movies more often
http://philanthropy.com/news/?id=10012&pth&utm_source=pt&utm_medium=newsletter&utm_content=lefttop
US Going Broke?
Robert Samuelson, a respected economist and columnist, poses this question here.
A good question, but his analysis is not quite on the mark. More interesting and relevant stuff is missing. Also he puts in a few alarmist bits for effects: "stampede in selling off stocks" is one such.
What does it mean "going broke"?
In normal parlance for mere mortals like you and me, that means typically the following:
1) your "friendly neighborhood" bank that holds your mortgage will take away your home because you are behind in your payments.
2) ditto with credit card
3) ditto with all your other valuables because you have pledged them to get loans to sustain your past life style
4) you got fired by your company because my my your disappearing credit in our civilized society marks you as an undesirable to be avoided.
Well, that's not going to happen like that in the case of US of A.
What would happen is something like this:
1) US government bills and bonds are begging for buyers by offering junk bond grade interests the way bad credit countries such as Argentina, Mexico and the likes have done so in the past.
2) dollar would remain weak and weaker
3) Contrary to Samuelson's scare words, stock markets may briefly tank due to some short term panic, however, as long as US companies continue to be creative and productive (e.g., Apple, Microsoft and yes even Goldman Sachs in financial engineering), foreign buyers can't wait to scoop up their shares.
I am just giving you a flavor of a list that is much longer.
Samuelson used Japan as a case study. At one point its debt to equity ratio, indeed, went sky high as that of the US would also do so. But hey, Japan never went "broke" in the normal sense. it is alive and kicking.
What needs to be watched carefully is this: id US consumers, meaning you and everyone else who live in the country, continue to live beyond their means on credit, then the Japan case study is irrelevant. Japan is a high savings country. US is not. Then US may not go "broke" but will look more and more like a Third World country -- a subject I have written much in my blog.
US leaders will behave in front of its credits with heads bowed speaking gently and with humility. And guess who is the single largest creditor?
Hint, It is a country that is a strategic competitor to the US and was once given a color to describe its ideology. If you don't know that immediately, you are not "allowed" to read my blog anymore.
A good question, but his analysis is not quite on the mark. More interesting and relevant stuff is missing. Also he puts in a few alarmist bits for effects: "stampede in selling off stocks" is one such.
What does it mean "going broke"?
In normal parlance for mere mortals like you and me, that means typically the following:
1) your "friendly neighborhood" bank that holds your mortgage will take away your home because you are behind in your payments.
2) ditto with credit card
3) ditto with all your other valuables because you have pledged them to get loans to sustain your past life style
4) you got fired by your company because my my your disappearing credit in our civilized society marks you as an undesirable to be avoided.
Well, that's not going to happen like that in the case of US of A.
What would happen is something like this:
1) US government bills and bonds are begging for buyers by offering junk bond grade interests the way bad credit countries such as Argentina, Mexico and the likes have done so in the past.
2) dollar would remain weak and weaker
3) Contrary to Samuelson's scare words, stock markets may briefly tank due to some short term panic, however, as long as US companies continue to be creative and productive (e.g., Apple, Microsoft and yes even Goldman Sachs in financial engineering), foreign buyers can't wait to scoop up their shares.
I am just giving you a flavor of a list that is much longer.
Samuelson used Japan as a case study. At one point its debt to equity ratio, indeed, went sky high as that of the US would also do so. But hey, Japan never went "broke" in the normal sense. it is alive and kicking.
What needs to be watched carefully is this: id US consumers, meaning you and everyone else who live in the country, continue to live beyond their means on credit, then the Japan case study is irrelevant. Japan is a high savings country. US is not. Then US may not go "broke" but will look more and more like a Third World country -- a subject I have written much in my blog.
US leaders will behave in front of its credits with heads bowed speaking gently and with humility. And guess who is the single largest creditor?
Hint, It is a country that is a strategic competitor to the US and was once given a color to describe its ideology. If you don't know that immediately, you are not "allowed" to read my blog anymore.
The Bizarre Mr. ex President of Taiwan
I knew for sometime this Mr. Chen was a little out of control. See my last article on him here.
His most recent antics can only be described as nuts. I quote from an article in The Economist, Oct 24 issue. It is a subscriber only site and I am not one!
Here are a couple of choice quotes:
..."This time [Mr. Chan] is up for treason, a crime that can carry the death penalty. The charge...springs from his own bizarre claim that, during his tenure, he was an American agent."...
..."[Mr. Chan claims] that as president he took orders from the Americans...arguing that American should intervene [in his court case] as Taiwan was technically under its occupation"...
Source: The Economist, Oct 24, 2009, page 52
For too many years his party, Democratic Progressive Party (DPP) spearheded Taiwan's unabashed Independent movement. He and DPP gave so many around the world the impression that this was one brave man leading a brave party for democracy and freedom. Well, it just wasn't so simple.
His most recent antics can only be described as nuts. I quote from an article in The Economist, Oct 24 issue. It is a subscriber only site and I am not one!
Here are a couple of choice quotes:
..."This time [Mr. Chan] is up for treason, a crime that can carry the death penalty. The charge...springs from his own bizarre claim that, during his tenure, he was an American agent."...
..."[Mr. Chan claims] that as president he took orders from the Americans...arguing that American should intervene [in his court case] as Taiwan was technically under its occupation"...
Source: The Economist, Oct 24, 2009, page 52
For too many years his party, Democratic Progressive Party (DPP) spearheded Taiwan's unabashed Independent movement. He and DPP gave so many around the world the impression that this was one brave man leading a brave party for democracy and freedom. Well, it just wasn't so simple.
University Presidents Compensation
Who says university jobs are poorly paid? The latest data reveal some surprises. Who would you guess is the highest paid university president in the US? Harvard? Stanford? Yale? 3 strikes, you are out.
Envelope please. The highest is Rensselaer Polytechnic Institute's Shirley Ann Jackson at US$1.6 million a year. Shirely who? Rensselaer? Not MIT?
Rennselaer Polytech is a respectable engineering school with a combined undergraduate and graduate student body of about 6600. MIT has a student body of 14,000. Latter is consistently ranked as number 1 science/engineering institute of higher learning in the US if not the world. It has 7 Nobel prize winners on its faculty and over 70 bombined past/present winners in its history. It has an endowment of over $11 billion before the bust. Rennselaer is ranked 31 in the latest US News report with a miniscule endowment.
MIT president's compensation at $880,000 not to mention Harvard's $690,000, Caltech's $700,000 do not even rank among the top 20.
So much for logic in the real world.
The latest news report on pay is here.
Envelope please. The highest is Rensselaer Polytechnic Institute's Shirley Ann Jackson at US$1.6 million a year. Shirely who? Rensselaer? Not MIT?
Rennselaer Polytech is a respectable engineering school with a combined undergraduate and graduate student body of about 6600. MIT has a student body of 14,000. Latter is consistently ranked as number 1 science/engineering institute of higher learning in the US if not the world. It has 7 Nobel prize winners on its faculty and over 70 bombined past/present winners in its history. It has an endowment of over $11 billion before the bust. Rennselaer is ranked 31 in the latest US News report with a miniscule endowment.
MIT president's compensation at $880,000 not to mention Harvard's $690,000, Caltech's $700,000 do not even rank among the top 20.
So much for logic in the real world.
The latest news report on pay is here.
China's Great Leap Forward in Education
Those who keep comparing India to China should remember this:
..."Determined to match or exceed the performance of developed nations, China’s government has poured billions of dollars into education in the last decade. The results are remarkable: Higher-education enrollment has more than tripled since 2000, and China today awards more college degrees than the United States and India combined. Annual awards of doctoral degrees rose sevenfold between 1996 and 2006.
But critics say the quality of teaching has suffered, and in recent years universities have become more politicized as Communist Party officials began to view a senior academic position as a ticket to career success"...
Source: NY Times Nov 2, 2009
It is a well-established axiom in theory of economic development that education is the single most important factor in growth.
The great leap in education in China is not without its problems. One well-known one is rampant plagiarism and inconsistent quality. That said, more education, however imperfect, is still better than none.
..."Determined to match or exceed the performance of developed nations, China’s government has poured billions of dollars into education in the last decade. The results are remarkable: Higher-education enrollment has more than tripled since 2000, and China today awards more college degrees than the United States and India combined. Annual awards of doctoral degrees rose sevenfold between 1996 and 2006.
But critics say the quality of teaching has suffered, and in recent years universities have become more politicized as Communist Party officials began to view a senior academic position as a ticket to career success"...
Source: NY Times Nov 2, 2009
It is a well-established axiom in theory of economic development that education is the single most important factor in growth.
The great leap in education in China is not without its problems. One well-known one is rampant plagiarism and inconsistent quality. That said, more education, however imperfect, is still better than none.
Monday, November 02, 2009
The Unraveling of the US War in Afghanistan
You know the headlines re Karzai "winning" the re-election in Afghanistan. The opponent pulled out because he said the results would be rigged.
The US was quick to congratulate Karzai. This is nuts. Karzai has no credibility. His brother is one of the world's largest opium suppliers -- with the blessing and money from the CIA. Afghans despise the endemic and systemic corruption that is the Karzai government.
Yet this is the guy the US is backing? Honestly do these foreign policy folks in the White House read anything about the Vietnam War where the same mistakes were being made backing a S Vietnamese government with no legitimacy and no credibility that was also corrupt to the core?
Well, stupid question, isn't it?
As the saying goes, those who don't remember history are doomed to repeat the same mistakes.
The US was quick to congratulate Karzai. This is nuts. Karzai has no credibility. His brother is one of the world's largest opium suppliers -- with the blessing and money from the CIA. Afghans despise the endemic and systemic corruption that is the Karzai government.
Yet this is the guy the US is backing? Honestly do these foreign policy folks in the White House read anything about the Vietnam War where the same mistakes were being made backing a S Vietnamese government with no legitimacy and no credibility that was also corrupt to the core?
Well, stupid question, isn't it?
As the saying goes, those who don't remember history are doomed to repeat the same mistakes.
Where Did the Tax $$ go?
The top 1% were the single largest beneficiaries. If the tax cut had not happened the nation's deficit would have been smaller by over $2 trillion.
The Headline said it all
Read this report which is yet again another proof that the war in Afghanistan is futile. Pretty soon US may have to feel necessary to push Karzai out, just as it did in S Vietnam. Then the bad becomes worse which will in the end spell disaster. This is such a familiar and bad movie
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