Saturday, August 29, 2015

Q&A - 29/8

Kemal Dervis

Everyone is talking about debt, citing huge nominal figures that strongly affect public-policy debates worldwide. But all debt is not created equal.

For starters, when it comes to public debt, there is a big difference between the gross and net figures. While Japan’s gross public debt, for example, is a massive 246% of GDP, the net figure, accounting for intra-government debts, is 127% of GDP.

Moreover, what should really matter about a country’s public-debt burden is the expected annual cost of servicing it. As Daniel Gros recently pointed out, debt that can be rolled over indefinitely at zero interest rates is no debt at all. This is an extreme example; but the closer a fixed interest rate gets to zero, and the longer the maturity becomes, the lower the burden of the stock of debt.

Although Greece’s public debt amounts to about 175% of GDP, low interest rates – which are fixed for a large proportion of it – and long maturities mean that it may be more manageable than it seems. Greece’s ratio of public-debt service to GDP is similar to that of Portugal, or even Italy. Indeed, that is why the latest deal with Greece, which entails even more bailout funds, could work [..]



Alvin Toffler talks about social innovation here. What are some other examples?

Here is one

There is a bar here in Berlin called Jager Bar; every other Sunday they organize a Jam Night for amateur musicians. They have all instruments for a band ready on a stage, and they prepare a list of songs, usually famous ones that a lot of people know how to play. Anyone can go to this list put their name for the instrument of that song if they know how to play it, i.e. I write mine for the drum part of YYZ by Rush someone else might go for the guitar part of Black Velvet, whatever. Once a song completes its "instrument list" the ppl who signed up for that song go on stage and play it.

This is a social innovation. The bar makes money by selling drinks to musicians while they are waiting, watching others, etc.  Usually their friends come in too, so it is a packed night (not bad for a Sunday). And this social innovation requires nothing more than a bloody pen and paper.

Bunch of Articles 

[Paraphrasing] Malaysia's Malay policy is failing [..] Lebanon's government is dysfuctional [..] Aung San Suu Kyi is authoritarian [..] Syria is f**ked.

Absence of a Dictator or Presence of Elections Does Not Equal Large W

All of the problems above could be fixed with the two-party-system-with-quotas approach we mentioned before. In Burma instead of a lightning-rod activist like Suu Kyi to have "another" party, you create two (without Suu Kyi in either one, less flash the better) - so the existing regime is not pit against the rest. 

In Lebanon the heartland of "sectarianism": each of the two parties would be forced to have, by law, 50% men, 50 women% of which 40% are Christian 60% Muslim members of which 30% must be Sunni and 30% Shite. Boom, as they say. The "distribution rule" can be implemented at various levels, but the end-result must be that each party, after the election, ends up with members in parliament exactly reflecting the allocation listed above.  Then, party A with that distribution gets elected, stays in there a while.. then time goes on, popularity starts to wane because the electorate is similar all around the world in that sense, they get tired of the party in power, then maybe there is an economic crisis (there is always a crisis), so they get the fuck out. Great! In their place, party B comes in with exactly same allocation.  No minority or majority "loses power", but power changes hands, more competition means better service.

Malaysia; the majority, Malays, will have the majority in both parties. However minorities can play the deciding factor in an election because they are inside each party who are otherwise very similar to eachother, so the minority's vote will be courted. Whichever minority favors one party in one election would reap the benefits after the election, perhaps at regional level first; "Chinese from Kuala Lumpur voted for us, let's give them little somethin somethin". 

Syria? The ultimate secterian hell hole? Obviously Sunnis will come to power, or be the major portion of either of the two parties, just like Shites are in Iraq - and the Russian rulers will have to swallow that whopper no matter what the consequences. But within two-party system minorities cannot be opressed anyway because they everyone has a say in one form or another. 

This system is a starting point obviously - as time goes on, some or all restrictions could be lifted. It is the best that is possible within the confines of a mass-election system. 

It is critical the system is based on party / parliament level, and the role of a President is minimal. President, as a single person, can become the single-point-of-failure (parliaments can influence their prime minister more efficiently), plus the campaigning around these people have a way of turning into these spinning-monkey shows where candidates are spewing inane vomit left and right talking bunch of non-sense (sorta like the Republican primary right now). The ultimate goal of our proposed system is to distribute the risk, rewards, be functional in any country with any ethnic / religious make-up and the volume gets TURNED DOWN.

Q&A - 21/5

Question How do you empirically prove interest rates do not cause increase or decrease in GDP growth? There is a test for that Data ,...