Whose Job Market?

Among the topics presented on this year’s job market were studies of the prison parole system in Georgia, (several) of HIV/AIDS in Africa , of child immunization in India, of the political bias of newspapers, of child soldiering, of racial profiling, of rain and leisure choices, of mosquito nets, of malaria, of treatment for leukemia, of the stages of child development, of special education, of war and democracy, of the effects of TV coverage on democracy, of bilingualism and democracy, and many others. (Among the leading departments, only Stanford’s graduate students appear to be working almost exclusively on traditional topics.)

The question: whose job market is that? a. criminologist, b. epidemiologist, c. political science, or d. none of them.

Yes, it's none of them. It's the US economist's job market in the year of 2007 --according to Angus Deaton of Princeton in his Letter to The Royal Economy Society of Britain last year.

I'm sure some cynics would give a snort and dub it as an economics imperialism, but I'd say it's cool. Very cool, indeed

HT: Marginal Revolution

The Worst Pick-up Line Ever is

"I hate to sound derivative, but I'd love to lie tangent to your curves."

Warning: apply strictly to the economist only --those dismal scientists.

The line also refers to Greg Mankiw's op-ed that basically says populism likely collides with the standard economics arguments (that includes legalizing marijuana, by the way).

Why? Not because supply and demand is too "complex." It is just not very emotionally satisfying.

Predicting poverty?

Last week I attended INDEF's mid-year evaluation on government policy, titled "Oil, Food and Poverty." One thing I particularly noted was their prediction that poverty rate will increase by around 1.3 percentage points next year. The main reason was the fuel price hike will create inflation, especially in the food, food products and transportation categories. They also predicted that inflation will rise to around 12 percent.

I've never been a big fan of economic predictions (though in my past job I had to do that). Among different indicators, I wonder if we can make a good prediction for poverty rate. Nevertheless, I wondered why they would predict poverty is to increase by 1.3 percentage points when, at the same time, they predict inflation will rise to 'only' 12 percent. In 2005, when the fuel price increased by 130 percent, inflation jumped to 18 percent, and headcount poverty rate increased by 1.8 percentage points. Now, with lower increase in both fuel price and inflation rate, they predict more or less the same magnitude of increase in poverty rate. Unless if we are facing a very difference situation between now and then, which, I think, is very hard to justify.

Their explanation in the Q&A session revealed that they didn't take the effect of BLT (cash transfer) into account. Well, perhaps because they, at least my colleague Ikhsan Modjo, one of the panelists, belong to the 'BLT is useless' school of thought. For sure, much to be done to improve BLT, and BLT is not a desirable long-term safety-net policy. However, discounting the impact of BLT in providing cushions for the poorest households is unfair.

In case you are interested, here is my comment and further elaboration on this issue.

Defender of French Culture

Tyler Cowen writes:

The French spend approximately $3 billion a year on cultural matters, and employ twelve thousand cultural bureaucrats, trying to nourish and preserve their vision of uniquely French culture. They have led a world movement to insist that culture is exempt from free trade agreements.

Creative Destruction, p.2

Twelve thousand bureaucrats to defend a culture.

But my question runs deeper: first, what is the so-called French culture? Hanging out in a cafe thinking about existensialism, deep-fried potatoes, or a certain smooching technique?

Second, what is a culture --the thing to preserve against free trade-- anyway?

Addendum: I think Asterix would be the best possible answer for my first question. Or Tanguy et Laverdure.

But I don't think Asterix and Obelix need any help from the government's bureaucrats. They know, if they are indeed competitive, thanks to their very own magic potion, even the mighty Romans would give up.

Hopkins (Johns, not Anthony)

OK, unlike AP, I don't watch TV series --except perhaps the old The Shield, because it was aired late at night.

But last night,incidentally, I was glued before the telly watching the third episode of Hopkins --they have six one-hour episodes out of 1500 hours footage.

It turns out that I like that reality show, named after a hospital in Baltimore, in which the doctors were actually pretty relaxing when playing god like doing a heart transplantation surgery. After all, that's their daily jobs and you can't expect one to be tensed in everyday's work, no?

And the scenes in surgery room were beautifully bloody.

And where is the economics, the moral of the story? Nothing. It's just a funny conversation with a customer relation officer good TV show.

Ec and the City

My wife and I finally watched the return these New York fab four. Yes, we are a fan of the TV series, so we've been anticipating the big screen version for quite a while. I thought the movie was a pretty good entertainment, and some reviews might be too harsh. I agree with Leila Chudori that the movie was lacking the series' twist and naughty plot. But, in the end, the movie is a 2-hour annex to the series. Not a repetition of the episodes when they were still at their 30s. So, please, it's not The Godfather or Little Women; it has the right to remain cheesy!

The plot revolves around Carrie and Big's relationship. How they decided to get married, then one of them got too obsessed and the other got scared, and how they got through with that. I tried to enjoy the movie by not thinking any economic theories. But still I couldn't help thinking of Becker's 'Economics of Marriage.' You can read Becker's account in his Nobel lecture here; a good summary of his theory (and how the theory evolved between the first JPE article in 1973 and his latter works, especially the 1981 Treatise) here; or in Tim Hartford's popular version here. But note that those pieces look at why do people decide to get married (and how do they choose partners) as opposed to being single. In Carrie and Big's case, the issue is why they want to move to one stable equilibrium (extra-marital cohabitation) to another one (marriage).

One of the movie's subplots is the troubled marriage of Miranda and Steve. The question is, when you have to decide whether you want to keep your marriage or terminate it, do you apply a cost-benefit type of calculation? Maybe. But, in the spirit of the movie, maybe not. It's harder to lose something you've actually had, even though you could 'trade' it with something you'd prefer to have in a counterfactual life. Economists call it the endowment effect, which may suggest, as this article argued, humans are irrational animals.

Or, in Carrie's words to Miranda, "Sorry, Harvard.. this time you need to make decision based on your emotions... not logic..." Ah, I think I'm too carried away with the movie.

Cultural What?

I am scratching my head.

Maybe you can help me to answer my (stupid) question: do you really think that the best way to to influence the perception of Islam in the U.S is to send

[...NU communities in Java have...] many amateur but excellent music, theater and martial arts groups that given the opportunity could easily capture a Western audience for a breathtaking hour or two. The very rich and sophisticated but relatively unknown performing arts of Banyuwangi (a traditional NU stronghold) for example, would be a safe bet to help shift perceptions of Islam in the U.S.

The same goes for the beautiful but devastating, obscure martial art of pencak silat. NU and its Pagar Nusa schools of pencak silat have many young and old masters who cannot only apply punches, kicks, takedowns, throws and joint locks, but can also, to an extent, defy gravity and demonstrate invincibility to fire and sharp blades. Managed creatively NU's artists could put together a show as entertaining as the famous Chinese State Circus, guaranteed to inspire and capture people's imagination.

and call it a cultural diplomacy?

Punches, kicks, sharp blades?

If you do think it is, then maybe the Jakarta Post's opinion editor was right.

Marx and Regular Basis Joke

From my used-book store visit yesterday, I bagged the 1976 first English edition of a comic book: Marx For Beginners (Karl, not Groucho), by the politically-funny Mexican cartoonist, Rius. On the way home, I overheard a woman said to a man on the escalator:

"You know, it's actually a kind of joke that I make on regular basis."

I burst into laughter myself.

Yes, the first derivative of utility function with respect to that thing you consume is positive and the second one is negative

From Murakami's A Wild Sheep Chase.

She nodded. She put the letters in her bag, which she fastened with a snap of the clasp. I lit up a second cigarette and ordered another whiskey. The second whiskey is always my favorite. From the third on, it no longer has any taste. It's just something to pour into your stomach.

In other words, du/dw = u' > 0 and u" < 0. The law of diminishing marginal utility, q.e.d.

Down with the Bear

If you have a long commuting trip, are stuck in a traffic jam, or don't know what to do to spend the weekend, I suggest you to pick up the latest Vanity Fair. No, not the Nabokovesque Miley Cyrus' (a.k.a Hannah Montana) photo shoot --that's in the past edition--, but this 8 pages long in the website version, or 16 full pages if you print it, journalist's investigation on the last days of the once mighty Bear Stearns.

It tells you how those big names in the financial world work, how influential the media is (CNBC, to be specific), and how the nervous Fed acted. If you don't know the different perceived style between Lynch, Sachs, Stanley, and Stearns in making money, like I do; or how important to speak up to the right news anchor is; or how close the Fed, Treasury, and Wallstreet are; then, perhaps, it's the right reading.

Here is what happened in that fateful night of the Bear.

That day was Dimon’s 52nd birthday, and he was celebrating with a quiet family dinner at Avra, a Greek restaurant on East 48th Street. He was irked when his private cell phone rang; it was to be used only in emergencies. On the line was Parr, who put Schwartz on as Dimon stepped outside onto the sidewalk. Schwartz quickly explained the depth of Bear’s plight and said, “We really need help.” Still irked, Dimon said, “How much?”

“As much as 30 billion,” Schwartz said.
“Alan, I can’t do that,” Dimon said. “It’s too much.”
“Well, could you guys buy us overnight?”
“I can’t—that’s impossible,” Dimon replied. “There’s no time to do the homework. We don’t know the issues. I’ve got a board.”

The people he should call, Dimon said, were at the Fed and the Treasury—the only place Bear could get $30 billion overnight. Still, Dimon promised to see what he could do to help. He hung up and dialed Tim Geithner at the New York Fed downtown. Twenty-first-century Wall Street is a highly interconnected world, with just about everyone lending billions of dollars to everyone else, and Geithner worried that Bear’s collapse might trigger a domino effect, taking down scores of other firms around the world; he urged Dimon in the strongest terms to think about somehow helping Bear. “Tim, look, we can’t do it alone,” Dimon said. “Just do something to get them to the weekend. Then you’ll have some time.”

In case you don't know the names: Jamie Dimon is the JP Morgan's CEO, Gary Parr a top investment banker of the Lazard Freres, Alan Schwartz the Bear Stearns' CEO, Tim Geithner the New York Fed's President.

A caveat, it's a journalist report, so don't expect for a heavy bibliography. Whether the account is true, let's wait for the responses from the parties mentioned.