Economics, Literature and Scepticism

Powered by Blogger.

About Me

My photo
I am a PhD student in Economics. I am originally from South Africa and plan to return there after my PhD. I completed my M. Comm in Economics and my MA In Creative Writing (Poetry) at the University of Cape Town, where I worked as a lecturer before starting my PhD.

Thursday, September 13, 2007

Three (Separate) Things: Abe, Pensions and China

Posted by Simon Halliday | Thursday, September 13, 2007 | Category: | 0 comments

As always, lots to talk about. The hot topics today have to do with firstly, the resignation of Japanese Leader, Shinzo Abe, and my opinions on the appeals to the constitutional court about inequality in social security. I’ll also comment on a couple other random things I’ve read.

The first issue, with respect to Japan is who is going to lead the country now that Abe has resigned? There are a couple of possible candidates in the Liberal Democratic Party (Abe’s Party), the Secretary-General Taro Aso (Not General Taro Aso as some papers reported) and Finance Minister Fukushiro Nukaga. Aso was the first to be told of Abe’s intentions to resign and is fairly close to Abe in the policies that he would implement, being hawkish and aligned to Abe on a number of other issues. Nukaga has other factors affecting his candidacy, such as scandals (twice stepping down from positions because of said scandals), but he is a political veteran in Japan. All very interesting. That being said, one of the most interesting outcomes from this will be the dispute over whether Japan will aid US ships looking to refuel in Afghanistan. This is one of the most contentious issues at the moment and could have the largest impact on Japan’s relationship with the US and its constitutional pacifist stance. Very interesting – watch this space. The other interesting impact is on the Japanese markets – they took a bit of a hit yesterday after the announcement with the Yen devaluing against the Dollar and the Euro. Fun times ahead. Even more fun for the Japanese Democratic Party I assure you...

With respect to the equality of pensions w.r.t. social security I think there are numerous problematic issues. In terms of a moral/equality issue, it is ‘right’ for the SA government to adjust the laws and to ensure that the money is disbursed to all people over 60 (rather than the cynical approach of increasing the pensionable age to 65 across the board). The only problem is that, empirically, it has been shown that there aren’t any statistically significant poverty or welfare consequences in households where there is a male pension eligible individual, or a male individual receiving a pension (sometimes actual pension receipt is under-reported in surveys because the households worry about what the surveyors will do with the information). However, when females receive the social grant (the pension is a social grant even if you mightn’t think it is), there are benefits that are directly transferred to the welfare of grandchildren and most significantly to granddaughters. There is no empirical evidence to support such an effect for male receivers of the pension. In terms of this evidence I don’t think it is worthwhile to increase the access of the grants to older men – there just isn’t evidence to show that it will do what Chaskalson and co. say it will. I also don’t think that the argument about it discriminating against gay men is particularly important, but I would like to see evidence on the matter. The problem ultimately depends on what government is attempting to do with the policy – if it is meant as an individual welfare improver or happiness helper then by all means provide it to these men. If, alternatively, it is meant as a ‘social security net’ for entire households (which is what I suspect it is intended for), then maybe this should be stated outright and maybe the system should be altered as a consequence. It’s a difficult one.

Otherwise, I was intrigued to read Thom Friedman’s article about a recent visit to Dalian, China and a commentary on focuses on energy, the Olympic games and other factors to improve domestic welfare, rather than the obsession with foreign policy that the US has as the world’s watchdog. At the Dalian University of Technology there are currently 100 PhD candidates all working on energy research, the Chinese government is opening its national energy innovation research center at the university. Friedman was attending an international conference where the Chinese Prime Minister, Wen Jiabao, was speaking about the successes that China has had and the challenges it faces in terms of energy, sustainability and so forth. All really interesting. China is one of THE places to be. I really hope to do research there at some point. Friedman retold the following story about a US Officer in Baghdad:

His unit was on a patrol in a Sunni neighborhood when it got hit by an I.E.D. Fortunately, the bomb exploded too soon and no one was hurt. His men jumped out and followed the detonation wire, which led 1,500 feet into the neighborhood. A U.S. Black Hawk helicopter was in the area and alerted the U.S. soldiers that a man was fleeing the scene on a bicycle. The soldiers asked the Black Hawk for help, and it swooped down and used its rotor blades to blow the insurgent off his bicycle, with a giant “whoosh,” and the U.S. soldiers captured him. That image of a $6 million high-tech U.S. helicopter with a highly trained pilot blowing an insurgent off his bicycle captures the absurdity of our situation in Iraq. The great Lebanese historian Kamal Salibi said it best: “Great powers should never get involved in the politics of small tribes.”

I love that image – the US as a Helicopter using its rotors to blow Iraq off its bicycle. Very entertaining.

Other cool article: Energy and South Africa – are we on a road to poverty with our growth plan? I don’t know, have to think about this more. Will comment another time.

Last thing – is Fred Thompson a valid candidate for the US presidency? I liked this comment by Gail Collins: “If it turns out that mixing a race for the most powerful job on the planet with two preschoolers is too much for any one 65-year-old man to do, millions of women will say, welcome to the club, Fred. We know how you feel.”



Comment on Energy:

Comment on Equality of Pension Laws

Shinzo Abe and Ensuing Leadership Battle

Iraq Idea vs. China Idea – Thom Friedman

Wednesday, September 12, 2007

Being Prepared

Posted by Simon Halliday | Wednesday, September 12, 2007 | Category: | 0 comments

OK so last night I was asleep in bed (because obviously one is often not asleep in one’s bed, but elsewhere). I awoke to the sounds of my dogs and the dogs next door going berserk (or bezek if you hear in South Africa). This blog is about my funny response.

To give you some background, we recently had a new alarm system installed. It has detectors on the walls, in the garden outside and we hear a chime every time someone walks in the garden outside, the obvious understanding being that we can hear if anyone leaps over the wall and prepare ourselves for anything that they might choose to do to us in our sleep. That and have an alarm that goes off if anything man-sized happens to be in our garden at night. Which is useful.

So there I was lying in bed, having awoken to the sound of dogs going completely off their rocker. I heard a car idling outside. I thought to myself, ‘I really hope that my car hasn’t been broken into, Oh well… if it is I can deal.’ The dogs upped their intensity for a moment.

At that point, I grabbed my tazer-torch and my garage opener that doubles as a mobile panic button (the big red button = I am panicking, help me). So there I was in blinking sudden wakefulness. Tazer in one hand, panic button in the other, pyjama pants leg riding up my thigh looking like the epitome of danger.

In walks my brother having just parked my mum’s car in the garage. He is trying to placate the dogs. It’s 2am and he’s come back from doing an open-mic thing at Zula on Long Street. It’s all indicative to me of the problem that crime constitutes in South Africa, a growing paranoia and a (professed and believed) necessity to ‘be prepared’. So that I was. But it isn’t the most psychologically pleasant feeling I must tell you.

I try to go back to sleep. But James leaves the lights on. I get up and swear at him in a brotherly fashion. Then beat myself up as I fall asleep for being grumpy at 2am. But that’s how I roll (or something equally vague and hip-hop).

Otherwise, I read a really entertaining article yesterday (suggested by Richard) on the different capacities of ‘liberal’ versus ‘conservative’ brains. Here’s the link:

The article made me laugh, but it also made me worry a bit. That being said, it appealed to the determinist in me. It also made me wonder what kinds of education or socialization make the brain more plastic or not and whether these factors are driven more by genetics than they are otherwise. Could be interesting.

Another interesting article, suggested by Mike Watson (a friend in the UK) refers to how Wi-fi and other wireless communication devices (mobile phones, etc) have had barely any testing on them with respect to their health outcomes. The German Environment Ministry has suggested that individuals should do their best to avoid using Wi-fi because of the potential damages to health, outcomes that have yet to be investigated properly by government domestically in SA or many others internationally. Other suggestions: use wire connections rather than wireless, using your landline phone rather than your mobile. Hmm… all very interesting.

Anyway, I am meant to be working. Only two days left. I am picking up my transcript translated into Italian today. R900 later of course! Crazy times. But that’s the price you pay for going to study at a foreign university…

Tuesday, September 11, 2007

Where’s My Trickle?

Posted by Simon Halliday | Tuesday, September 11, 2007 | Category: | 0 comments

So I was reading Paul Krugman’s Op-Ed today. He was talking about how the tax cuts in the US are meant to have affected your every day middle-class American. You can see the article at the following URL, or email me and I’ll put it up (though the NY Times may be a hater if I do that) I stole his title 'Where's my trickle?' it was too catchy not to use it!

Anyway, I thought about how apt this is for South Africa. One of the reasons that people have been rioting on the N2 is because they are basically wondering “Where is my trickle?” Probably in stronger language that that, and quite probably not as astutely stated, but that’s basically what they want to know. They want to know where their houses, high quality services and access to better quality education all are. They want to know “Why are we still so poor?” Now, I’d be the first to say that policy takes a while to have an effect on actual outcomes, but there are numerous examples world-wide of projects that have worked for the poor and done so within a relatively short period of time.

A much-quoted and referred to example is Mexico’s PROGRESA project (now Opportunidades), that targeted poor families and was run as a randomized evaluation pilot project for the now larger scale Opportunidades. What made this program so important was that it offered a conditional cash grant rather than just a random ‘here-you-go’ grant (As an aside: PROGRESA targeted women in the household, you don’t need to be a genius to realize why). As a consequence, children’s school attendance, test scores, health outcomes, nutrition and other outcomes improved. Once more, this requires massive bureaucratic buy-in and competent individuals on the ground monitoring and evaluating what people are doing. Note too that there is evidence that simply monitoring schools by government has a positive effect – not only monitoring student attendance, but monitoring teacher inputs (basically just checking whether they arrive to teach!).

What astounds me is that we haven’t had something similar to this put in place in South Africa. Why don’t we hear of more pilot projects by government to implement poverty-alleviating policies? Why don’t we go to individual families directly and give them their ‘trickle’, rather than telling them that they’ll eventually be affected by policies that benefit those who are already rich and who don’t really need that great an incentive to get richer? Why aren’t there more incentive-compatible policies put in place to ensure that families act in such a way that they will be less likely to remain in poverty, rather than reinforcing behaviours and conduct that isn’t going to help the current generations or those that follow? I don’t get it.

Personally, I’m not too worried about where my trickle is – in fact I’ve probably received one or two immoral trickles as a direct consequence of apartheid. I don’t need policies to help me directly. But the poor in our country desperately do. They need something and they need it now. They need government to affect their lives directly in such a way that government is doings its best to help them, and also to help them help themselves. Anyway, enough. Read the Krugman. Read Duflo’s article on monitoring (I can provide the reference if you want it). Google papers on PROGRESA there are loads. Arrivedeci, Si.

Monday, September 10, 2007

DA good times

Posted by Simon Halliday | Monday, September 10, 2007 | Category: | 1 comments

Well, things have been happening in SA of late. Mostly odd and politically dangerous in my mind, but that could just be me overreacting to that which I observe. Last week a DA parliamentarian asked for information about Manto Tshabalala-Msimang, wanting to know whether the government had known if she had a criminal record. He was thrown out of parliament.

More recently, on Sunday September 9, the Mayor of Cape Town, Helen Zille, was arrested for taking part in a march. The march was legal. The march was against police apathy and inactivity in Mitchell's Plain. The Mitchell's Plain police made the time though to arrest Zille, a drug-protesting Muslim priest (Imam) and several others. Go POLICE!

The ANC meeting in December looms. There are two well-stated camps. The one supports President Mbeki standing for a third time and the ANC amending the constitution. The other camp stands for Jacob Zuma being the ANC President (and therefore SA's next president). Neither of these are good outcomes. In fact they are particularly poor. Mbeki has several individuals who he thinks should get the presidency, of which Joel Netshitenzhe is one. However, Netshitenzhe is about as charismatic (and therefore as likely) to get the presidency as a soft-rotting carrot at the back of a fridge. He's a supremely bright character involved in the drafting of all central policy in the country, but none of the grass roots (the ANC's /Zuma's favourite people) know who the hell he is. Oh well...

And I am leaving in two and a half weeks. 16 days to be exact. Weird. I am going to have to become accustomed to an entirely different political structure in Italy and acquaint myself far better with EU politics than I am currently. British politics I have down pat - Cameron is a conservative twit with a carrot up his bum. Brown is the successor to a Blair who went wonky, but we're hoping he'll pull through and stop brown-nosing Bush. Apologies for the nether region imagery.

In other news it has finally and conclusively been shown that colourants and additives in food cause hyperactivity. GO the British FSA! Carefully controlled and tightly researched it shows that additives can affect ALL children and not just those 'prone to ADHD'. Hmm... Well done you lot, telling us what mum told me when I insisted on eating my box of smarties and then bounced around the room like a gummie bear on speed. Once and for all showing that Mum (and Mrs. Larsen) knows best.

Returning to me leaving (see what I did there) I have crazy amounts to do before departure. Non-trivially including the pending hand-in of my Creative Writing dissertation. Should be interesting. I am reaching the point with some of the poems where I feel (if I could validly anthropomorphise them) like strangling them, chopping their little heads off and treading them into a merry mulch. However, others are like cool, serene waters that placate me, caressing my warm head with gentle fingers and lulling me into a false sense of poetic security. Oh well...

Ok, must be off. I should be working.