Obamafication.

Mike Tomasky assesses the recent spur of Obama-hate quite accurately in his piece titled, "Hate Obama? You may not be a racist. But you will be white.".

I am personally not a fan of Obama's public health care. My reason is simple - I do not believe that it is sustainable in the long run. Of course the incumbent health care isn't sustainable either, but the alternative, in my view is just as bad. Especially after the government budget deficit is projected to remain over 1 trillion dollars for the next decade. This is going back to the Regan and Bush sr. era, except now there is an ongoing recession; even if the worst bits of the recession is over, as analysts say, the left over effects are still being felt by the main street.

I digress.

I intend to talk about Obama. When Obama won, the headlines from then can be summarized as A NEW DAWN AFTER AN ETERNITY SPENT IN DARKNESS - darkness here being the Bush Administration. I feel we made a cult figure out of Obama even before the man resumed office. We took his campaign rhetorics and went along with it, expressing our awe at the man's (potential) capacity to right the wrongs made by Bush.

So far Obama's delivery in his promises is going less than impeccably. Guantanamo Bay is still operating (EDIT: Guantanamo won't close by January 2010 - Obama) - even though the trail for the perpetrators of 9/11 has been ordered. US troops are still in Iraq; okay granted the crucial bill was passed, and a ray of hope has emerged, it still doesn't guarantee anything. Afghanistan is still a mess. Pakistan is deteriorating.

Politics aside, US unemployment rate broke into double digits last month, jobs are still being lost, companies are still not hiring, and China continues to peg its exchange rate against the dollars. In a nutshell, eleven months after Obama assumed office, the United States is still being screwed.

Because of the impossible ideals we built around Obama, making him nothing short of a miracle worker, the current state of the world and primarily the US economy is breeding discontent with the Obama administration. We are beginning to doubt his capability - which, I am not questioning, but simply reiterating that thanks to our sky high expectations, whatever Obama does henceforth is not going to be enough. Unless one day we wake to find that unemployment rate has gone down to its natural level, the wars in Iraq and Afghanistan has miraculously ended, China is allowing the Yuan to float against the US $ etc. Basically, Obama has to deliver us Utopia to silence the critics.

Of course the racial factor will ALWAYS be there. I'd like to give USofA the benefit of the doubt and assume that the race factor is a small proportion of people - mostly prevalent in the white conservative camps. Someone mentioned a very valid point last night on BBC's World Have Your Say. Because Obama is African-American, and because race has been such a highly debated, and controversial issue in the USA, a lot of people voted for Obama simply because he was black. Similarly, a lot of them voted for McCain just because he is white. The speaker actually went on to explain, if instead of Obama it were Hilary Clinton running for presidency, a lot of the feminist advocates would vote for Hilary just because she is a woman. And the alternative is true too.

What I am trying to highlight here is that the post-Obama euphoria is subsiding. And people are beginning to realize that Obama is not a miracle worker. That Iraq and Afghanistan will take time to be mitigated; that the financial crisis will also take time to level out and for the US economy to start growing sustainably again.

Obama needs time.

Whether he gets it or not will most certainly influence the future of world politics.

More edits: Veto of Iraq's Election Law Could Force Delay in Vote, and China Holds Firm on Major Issues in Obama's Visit. More backlash in the horizon? It'd be a shame if Obama is ousted from office even before his first term as President reaches its half way mark. Give the guy some time, world at large. Please?

An ode to Economics

by, The Sanctimonious Fanatical Pickle

economics is,
a lover's quarrel
at best;
a painful divorce
otherwise.

cost and benefit
our star crossed micro-lovers
their fates sealed
by the evil clutches
of economic profits.

their love is ephemeral;
when for one short period, cost
equals benefits
and the world temporarily settles
for normal equilibrium profits.

but mostly the greedy
functionalities
of supernormal profits
dominate - powerful forces,
we like to call externalities.

economics can also be,
an artist's master piece
at best;
a child's textbook doodle
otherwise.

how else can we explain?
the pixel perfect picture
of an open market
full employment, low inflation
like a happy family portrait

then,
cleverly justify,
the rising prices of goods,
the rising cost of unemployment
the continuing economic conundrum.

keynes, milton, fisher and modigliani
and many before, many after,
have tried and tested;
to explain the unpredictability of
behavioral economics.

at the end of the day,
we learn it because
we have to; but after graduation,
we forget all about it
because we need to

this is not a tribute,
not a testament,
not an eulogy
but an ode,
to the science of society.

You are a nazi because I say so!

Paul Krugman on extending Godwin's Law (and rightfully so).

My desire?

To include anyone who thinks that just because they have read university level economics modules, political science modules, and public policy modules (and believe in extreme government intervention- basically the concept of a 'nanny state'), they are well educated, knowledgeable liberals. Though by Mr. Krugman's definition, the parenthesis has already been covered in his point no. 1 and 2.

Wish me luck, as you wave me goodbye. Cheerio, here I go,on my way...

Obama Says U.S. Seeks to Build Stronger Ties to China. You know what they say; If you can't beat them, join them. Does this mean the world at large will gradually accept China's pegged exchange rate? (Point of note/amusement): Some kook confidently said to me before that China has a floating exchange rate because...well his uncle thinks so.

Though I object heavily to the article's sweeping generalization that ASEAN is just an economic group. It is more than than that - it was formed to regionalize South East Asia with the aim of promoting regional security and strengthening cultural ties. Economics has hardly been the driving factor behind a significant portion of ASEAN's four decades worth of history.

If it were, the Asian Financial Crisis would not have dented Singapore's economy as badly as it did; when the Baht fell, the Rupiah fell, the Ringgit fell, it was a "Beggar thy neighbour" attitude that prospered in the region. Anyway, I am not nitpicking here - as someone who is studying ASEAN as part of her university coursework, I oppose to blunt generalization of its function as just an economic group. Oh and for posterity's sake - ASEAN is not the Asian version of the EU.

A caveat (of some interest): ASEAN members never interfere with the internal politics of their member countries; which is why it's credibility has been repeatedly questioned over its stance on the crackdown that happened in Myanmar two years ago.

I'm curious to see what they achieve out of APEC Summit this weekend. The securities have locked down major roads leading up to the central business district here in the name of housing so many important leaders, including the man touted to be the most powerful in the world. Despite my cynicism towards the USofA, I am a fan of Obama. I believe he has a strong character that was seriously lacking in Bush. Though I must say, so far, after resuming office for nearly a year he hasn't made as much progress as he had been projecting during the presidential campaign. However, Iraq's recent passing of the election bill and the recent decision to try Khalid Shaikh Mohammed - the mastermind behind 9/11 in court (in the process of shutting down Guantanamo Bay) injects some optimism among those beginning to question the validity of Obama's campaign promises. The healthcare bill - I am not certain how durable it is going to be in the long run; from the little I have learned in Economics, government sponsored bills are not sustainable in the long run. Granted I have not actually seen the bill properly - though if you scurry around the NYtimes website, you'll find a copy up for download somewhere. I came across it the other day, but my misfortune that I forgot to at least save a link for it.

I am going to put the following point as a place holder:

Due to my inability to sleep without listening to the radio, I have developed a long standing habit of listening to BBC radio on 88.9 FM. Thanks to the time difference, at exactly about 2 a.m. local time they air the BBC World Have Your Say. I am a huge fan of the debates that go back and forth for the hour - some of the arguments are enviably well thought-out and effortlessly executed. Others are just plain stupid. Every time I formulate my own argument and post it on their blog, the show ends. IT IS NOT A MERRY COINCIDENCE. Yesterday they were discussing about Depression and should sufferers be more forthcoming with their conditions. I had a lot to say on this issue - I do suffer from it, and while my case isn't serious enough to seek intense medical help, I have had to drastically adjust my life, my schedules to cope with it. I do just fine - I don't need pills or therapy anymore. Granted the episodic outbursts cannot be helped (it's like epilepsy; the medicine helps to keep it under control, not fully cure it), I have done just fine for five years now.

I don't like advertising my condition to people - I don't want them to treat me differently. I certainly oppose the idea of conveying a very weak and fragile state of my mind. I am neither; I am tough as a diamond and to be denied opportunities or given leeway because people pity me is not acceptable to my conscience. It can even be annoying at times, when, unintentionally, I divulge into people that I do suffer from depressive episodes from time to time. The first response, quite naturally, I get is, "You are depressed? Why we had no idea!" Of course you don't. Most sufferers of depression you see appear perfectly normal in plainsight. There is a clear distinction between emo/gothic/punk and those who actually have clinical depression.

Anyway, back to my comment about World Have your Say, WHO DO I HAVE TO SHAG/MURDER/DEFENESTRATE (not necessarily in that order) TO GET MY COMMENT READ OUT ON AIR? I'll try tonight. Wish me luck, as you wave me goodbye. Cheerio, here I go,on my way...

i promise to think of a good title later.

I just finished revising the basic fundamentals of the Solow Model of Growth. Of course the in-depth analysis (of how savings rate affect the economy, the instances when an economy starts off with too much or too little capital AND THE STUPIDLY LONG WINDED ENDOGENOUS GROWTH THEORY) remains to be covered. With finals less than a month away, I am reasonably satisfied with the amount of progress I am making. I am starting early; something I failed to do in my freshman year, leaving everything to the last minute and as a result my Grade Point Average suffered. It’s ironic that in this semester (of my Sophomore year), I am much more motivated to do well than I was the whole of my freshman year. There is a catch though – I have to work hard to be able to qualify for Honours. An economics degree without honours, in my view, is equivalent to not securing a Bachelors degree at all.

The top graduate schools (for Economics) are constantly on the look out for top scholars with near perfect GPA, tons of research/working/internship experiences in the field. To be able to stand a chance to compete, I need an Honours degree. I need a minimum of Second Upper Class which, at this point in time, looks like an impossible feat. I do regret the slack and absolute lack of discipline in my first year. My father puts it aptly, “You screw up your first year so badly, that you spend the rest of your time (at the institution) playing catch up.” This was exactly what had happened in Secondary School and Junior College. He feels it restricts my potential; puts a damper on it if I am desperately trying to get my grades up above average rather than striving for a near perfect GPA.

At this point I have to seriously consider the possibility of graduating with a B.Social Sci degree, get some work experience under my belt and then apply for Graduate school. Of course mathematically it is not out of bounds yet; but the tricky thing is that with every semester the modules aren’t getting easier.

However, I know I have the aptitude for it. The current module I am doing is a Level 3 module. I performed disastrously for its Level 2 equivalent. Logic dictates that Level 3 is inherently tougher than level 2. I am finding Level 3 a breeze; it has drawn plenty of gasps and odd facial expressions from my friends. Why? I asked myself. The answer is simple. This semester I have been a lot more disciplined. Living at home, as opposed to dorm, helped get my mindset into shape again. I am working hard again (not as hard as I would ideally like to, but this is baby steps towards the ammendment process), I have begun my revision early and I shouldn’t be here crafting this entry but my head is going to explode if I have to review another word from my Macroeconomic Analysis lecture note.

Speaking of Macro (as it shall be referred to from this point onward), why can’t the Professor follow the build up given in the textbook? (Mankiw, G, Macroeconomics, Sixth Edition) Makiw starts with the basic Production function, builds up the impact of Money supply in the economy, then International Trade, before introducing the Solow Model of Growth and finally the big picture of the IS-LM/AD-AS concepts. Reading the textbook makes more sense as opposed to my lecture notes. We started with the Solow Model, we hopped to Money and Banking, we did Consumption Theory and Investment and now we are doing IS-LM/AD-AS concept. Next we’ll be doing the merits (demerits) of the Short Run and Long Run macro policies and then end with Open Economy. Which means, International Trade – MY FAVOURITE DARLING MACRO TOPIC – has to wait right till the end of the semester, in exactly 3 weeks. Boo. Hiss. Throwing a tantrum.

I think I am going to take one day at a time. Do my revisions systemetically so that I am not at a loss before the final examinations. Whatever happens from thereafter, I am not going to waste my time worrying about it. Just yet.

If you still haven’t figured it out, this is a feel good/self motivational post. Because once in a while I need to tell myself that I am not going to screw things up. That I am not restrained by my past. I can do anything I want if I put my heart/mind/soul to it. And I will.

It's a pig, no it's a man...no it's....H1N1

(Youtube is not entirely about music videos and stand up comedy. Once in a while, you come across some informative or practical - for real life usage)

Despite its pandemic status, I have successfully managed to ignore it so far. Three scares and two false alarms later, I remain unconcerned by placing blind trust in my immune system. (At a time like this, I appreciate my parents' enthusiasm, almost two decades ago, to get me an overwhelming number of vaccine shots; despite my kicking and screaming and ear shattering wails) However, my mother's diabetic. Contracting the virus will not do any lasting harm on me - considering I avoid the unnecessary complications - but it might endanger my mother. That scares me, more than the question of my own well being. Singapore, even though many like to vehemently deny, is a hotzone. Being extra precautionary is not a sign of paranoia. People need to understand this; I need to understand this.

(This video post serves three purposes. 1) Provide some basic information on the H1N1 strain. 2) For your viewing convenience, dear imaginary reader and 3) a placeholder for future references.)

ETA: Fed Plans to Vet Banker Pay to Discourage Risky Practices

The officials emphasized that the plan was not intended to make pay packages more socially equitable but was part of a broader effort by the Fed to shore up the stability of the banking system. That effort has included tighter supervision of lending and trading practices and higher requirements for capital held as a cushion against losses.

So the FED is going to let the banking hierarchy get away with making millions, on tax payers' money? At least they are increasing the reserved requirement ratio - the amount of capital they expect, by law, the banks to hold back before they lend out the rest of their liabilities. The problem however is that the banks aren't lending! There have been very little long term investment to kick-start the upward movement along the business cycle. I only have 3 basic level economics courses under my belt - I have recently embarked on my sophomoric journey this academic year - in university and even I can posit that the way Fed's going, it is going to take a long time before any sign of progress is made. After exhausting its monetary policy, perhaps the government should look to making changes in its fiscal policy - except with a trillion dollar debt per year for the next decade, their hands are pretty much tied. America needs to increase their savings rate; they need to push it up beyond the 10% that is hypothesized (the actual rate is considerably lower).

wall street 213129839012831 - 0 main street

"We're very aware of what's going on in the world, but we have to trade that off with being fair to our people who, we believe, have performed admirably throughout this crisis." - David Viniar, CFO, Goldman Sachs.

I don't even know what to say, except wave a white flag of resignation. Main street's always gonna pay for Wall Street's fuckery. Be as fair as you want to your people, but what about the taxpayers whose hard earned dollars put you back in shape? They are still unemployed, their household income still remains low, there is still tension floating in the jobs market, the financial market and hell the crisis still has a long long long way to go before we see positive signs of recovery worldwide (not to mention the US government's trillion dollar debt per year for the next infinite - exaggerated, I know - number of years). Paying your employees a renumeration of $527,000 per person doesn't even out your $200m charitable contribution - it's noble but it's not enough.

Yes I am bitter.

Even if I have no direct relation with Goldman Sachs, in a grand scheme of things, whatever fuckery that goes on Wall Street inevitably affects me, and the income of my household, 10,000 miles away. (The ironic thing is, five years later after graduation, if Goldman Sachs offers a job, I'd take it without a second's hesitation. Yes I'm a hypocrite - so I've been told)

your last hurrah...yen

If this is the Yen's last hurrah, I wonder what the implications might be for Singapore.

Like Japan, Singapore has a excellent national savings rate - which is never fully disclosed and for the right reasons. From as far as I know, most of it is used to service public investments abroad. Singapore in that sense is cushioned for the time being, relying on its negative public debt (it is negative I think. I will check and edit this post should it turn out differently) to further expand on its infrastructure and prepare to fundamentally change the economy to suit the changing needs of multi-nationals. Sometimes I wonder how differently Singapore would have coped if it A) Never separated from Malaysia or B) Had adequate landmass, labour pool and natural resources.

I am currently studying, as part of a university requirement, a module on Singapore's history - one part political, one part social and one part on its economic history. One of my readings proclaimed (by Linda Low) that the government, on hindsight, did not have a grand plan in the eve of 1965 (right before merger). They improvised, made it up as they went along, guided by a group of highly motivated individuals in the process - I'm talking about the first generation PAP leaders - the links of Mr. Lee Kuan Yew, Dr. Goh Kheng Swee and Mr. S. Rajarathnam.

As a foreigner here, I have heard many locals complaining about the limited liberty they have here to express themselves. Some tell me they are not allowed to openly critcize the government, while others posit that PAP's unicameral politics is turning many youngsters apathetic towards Singapore politics. I don't hold an opinion on what they say to me, because first of all, I am an immigrant. My areas of concern lie more with the Manmohan Singh government, Indian National Congress and India's economic performance. However, on occasions I feel the need to point out to these people that not everything the government did or is doing has been out of line. Think about it, dear imaginary reader, post 1965, with the loss of a common goods market (that many envisioned Malaysia to provide), high unemployment arising from post war population boom, and absolutely no natural resources at its disposition, the government did turn Singapore into a first world country (with third world privileges). It takes meticulous planning, or improvisation in this case to pull off something like that. In their haste to critcize, which by the way is a common mentality here, the government, most of the people I come into contact with overlook this.

I should stop typing and finish off making note cards on Singapore's Education policy through the last half of the century.

Also, in a context not remotely related to the ongoing financial meltdown (hello Japanese government debt, which is almost as impressive as that of the US of A), the price of cockiness is almost cathartic. Funny too, to add on to the list. I hope Liverpool's defeat against Lyon is going to temporarily shut up the small fraction of their obnoxious fanbase whom I loathe - the ones who need to remind the rest of the football world about their five European cup triumphs. (By contrast, even the most hardcore of Real Madrid fans I have had the fortune of running into, do not need to boast or continuously remind everyone about their 9 European Champions league triumphs.

Though I am not generalising. The majority of the Merseysiders are polite - and indulge in civil rivalry with other fans. It's always the handfuls isn't it? Stupid black sheeps of the flock. No matter. I am just going to watch and snicker from the sidelines as they try to comfort each other by...yep, you guessed it. By reminding themselves how glorious their club used to be (yes they were, but overdoing it loses the appeal - clearly they missed the memo).

An untimely rambling.

Paul Krugman's latest discourse on the banking system in the US of A makes an interesting read; my point of relevance being my field of study and some personal interest. He essentially says that Goldman Sachs' sky rocketing profits in the third quarter, the gradual return to the practice of excessive wages for the Wall Street hierarchy does not spell the end of the crisis, as some might have been inclined to believe. The unemployment rate (not just restricted to the US) is still high, investors are wary which explains the flourish/profitability in trading operations and not long term investments.

But there’s an even bigger problem: while the wheeler-dealer side of the financial industry, a k a trading operations, is highly profitable again, the part of banking that really matters — lending, which fuels investment and job creation — is not. Key banks remain financially weak, and their weakness is hurting the economy as a whole.

He further mentions CitiGroup and Bank of America - the "weakest links" of the banking systems, still posting losses (which the CNN article helps to break down and explain better), he writes about how banks are still not lending, and lending is what the US economy needs to spearhead investment, jobs and future growth.

According to the Lawrence Summers (Chief Economist for the Obama administration), "There is no financial institution that exists today that is not the direct or indirect beneficiary of trillions of dollars of taxpayer support for the financial system." It paints a depressing picture of the situation at hand today (though according to the CNN article, Goldman Sachs has apparently paid back $10bn of taxpayers money to the US government). Main Street is still suffering, the ripple effects of this crisis is still being felt all over the world, and Singapore is venturing options of providing efficient and effective labour at an even lower wage. I find the inequity instrumental in the failings of the financial infrastructures this past year.

I believe that in a capitalist society equality of income is never desired. It can backfire, provide a disincentive for people to work harder, essentially resulting in a dwindling level of efficiency. With companies excessively looking for ways to cut cost, (outsourcing) this would create further exacerbate the situation. As idealistic as it sounds on paper, most people (those who do not particularly care about the field economics) champion for equal wages, for bridging the rich-poor divide (which, to some extent I support) and reach an idealistic utopia - sounds familiar?

Think about it. You work 10 hours a day and earn $100. Your friend works for 5 hours a day and also earns $100 in a truly equal society. Seeing your friend laze around on his couch while you are frantically trying to finish up the report and have it on your boss's table by the end of the day, will undoubtedly make you question yourself. Why are you working twice as hard as he is, and still getting paid the same amount of salary as him? In effect, he gets paid twice as much as you are (in five hours) by putting in half the effort.

Economists and social scientists can draw up thousands of complex models, with minimal error that can, and has rightfully predicted a lot of outcome in the long term. However, models, in my opinion, can never have the capacity to account for the one crucial factor, the last piece of a very complex puzzle you can say - human capital. We cannot substantiate human capital and condense it into a variable (X or Y, or a number between 0 to 1) and put it into the model and expect it to generate precisely, the future of our state, and our economy. If we did, this financial crisis would have never happened.

The question about low wages for Singapore was posted on one of my subject forums - funny thing is that the subject has nothing to do with Economics. In fact far from it. Singapore's export dependency can't be helped, and its land size, and population contribute to its vulnerability against global factors on the financial platform. Everything, including water is imported and while Singapore still retains a lot of higher skilled work, outsourced by MNCs from Europe or the USA, the fast rise of its neighbours - not even India and China - like Indonesia might change the status quo in the future. A lot of my colleagues/friends/classmates seem to be under the impression that because Singapore's a 'tiny red dot', nothing world shattering will ever happen to them. Contrasting that with the constant complaints about how foreign talents are sweeping away jobs from the locals (at 1/4 the salary) amuses me.

This is why I am love reading Economics. In my freshman year, while trying to adjust to the aggressive transition from Junior College life to University life, I had momentarily lost my passion for the subject. The more I read about the financial situation of the world today, the more I am beginning to appreciate it again. Precisely because I can apply things I am learning in the classroom, to the real life out there - true I can do without the complex formulas from time to time, but no matter...