Ricardo says: No time to pick a fight with China

That is my former boss (and one of the coolest economists ever) Ricardo Hausmann. Here's the punchline: Constructing this alternative development path is difficult and urgent. It is a win-win strategy for China and the world. Let us not derail it by promoting a confrontation on the parity of the renminbi that may lead to an even sharper recession in China. The whole article is here. 

If you are interested in "Ricardian" economics, here is Ricardo Caballero.

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2 Rainbows

The view from my office window: Today at 4:40 PM

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Daron Acemoglu on the crisis

In our obliviousness to the importance of market-supporting institutions we were in sync with policymakers. They were lured by ideological notions derived from Ayn Rand novels rather than economic theory. And we let their policies and rhetoric set the agenda for our thinking about the world and worse, perhaps, even for our policy advice. In hindsight, we should not be surprised that unregulated profit-seeking individuals have taken risks from which they benefit and others lose. The rest if here
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Before and after

Here
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Prejudices

The Economist has a nice article about our hidden prejudices. Among other things, it shows that many of us are biased (without realizing we are) against overweight people. This reminded me of something that happened during my first year of grad school. I was taking, together with a dozen of other graduate students, a course for future teaching assistants. One day, the course facilitator showed us pictures of several students and asked us to guess the best and worst students.  There was a wide variance in the choice of the best student, but everybody picked the same person as the worst student: it was an overweight woman (actually, almost everybody; my friend Nada said that it was impossible to answer the question by just looking at a picture.  OK, I know what you are thinking and, no, Nada is not overweight).

Here are some racism tests.

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Names

We are expecting a baby girl and we alredy have a name, but if we didn't we would not ask the Campbell family for advice . Check this out: Heath Campbell told the Easton-Express Times last year that he named his son after Adolf Hitler because he liked it and "no one else in the world would have that name."

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Wow

Plane Crashes in Hudson; All Passengers Safe

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Donuts and international politics

Too bad I never go to Dunkin' Donuts and thus I cannot boycott the company (but I think that SiL Rori goes there). But I cannot believe that they pulled out an ad because some lunatic complained about Rachel Ray's scarf. Here is the story. More here.
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Most loathsome people of 2008

Here (for earlier lists: 2007, 2006, 2005, 2004, 2002) . A few examples:

• 1. Sarah Palin: Charges: If you want to know why the rest of the world is scared of Americans, consider the fact that after two terms of disastrous rule by a small-minded ignoramus, 46% of us apparently thought the problem was that he wasn’t quite stupid enough. Palin’s unending emissions of baffling, evasive incoherence should have disqualified her for any position that involved a desk, let alone placing her one erratic heartbeat from the presidency.
• 4. George W. Bush: Charges: It’s hard—believe us, we know—to keep coming up with new things to say about this brutally stupid narcissist, who may have ruined this country irrevocably and certainly has ruined a couple of others, mugging amiably all the way... We used to think that incompetence was just a good cover story for this administration, an excuse that masked their deliberate criminality, but it turns out that Bush and his inner circle are both treasonous, corrupt warmongers and inept fools. One good thing about him, though, is that he has no real interest in politics, and probably won’t give a flying shoe what happens to the world when his term is up. As he once put it, ““History, we don’t know. We’ll all be dead.” Here’s to George W. Bush being history.
• 7. Dick Cheney Charges: Still alive. The amount of medical resources devoted to keeping this black hole of decency operational could have cured cancer by now, but if they had, Cheney would make sure to keep it a secret. Since Watergate, Cheney’s been fighting to rehab Nixon’s image, and he has succeeded in a way, by showing us all just how much worse a presidency can be.
• 10. Bernard Madoff: Charges: Normally, the idea of a bunch of billionaires getting robbed blind for believing in a free lunch would amuse the hell out of us, but Bernie Madoff stole a lot of money from charity endowments, and is responsible for two suicides so far. Here’s a tip, Bernie: If you’re running the biggest scam since the Catholic church, handling billions of dollars, and all it takes to get busted is that some of your marks ask for their money back, you really should take some of that money and set up an escape plan. Still, he gets some credit for making Mort Zuckerman look like a jackass. The real villains here are Christopher Cox and the SEC, who investigated Madoff eight times, the last time specifically on suspicion of running a Ponzi scheme, each time “finding” no wrongdoing, which begs the all-too-familiar question of the last eight years: Satanically corrupt or grossly incompetent? Either way, Madoff was finally brought to justice… by his kids.
• 11. Rush Limbaugh: Charges: The father of modern stupidity, Limbaugh spins reflexively, never struggling with issues, because he knows his conclusion must favor Republicans, and his only task is finding a way to get there. In other words, he may or may not actually believe what he’s saying, but it’s beside the point. His job is not to say what he thinks, but to instruct his listeners on what they should think. If the facts don’t agree, he can always change them, as his “ditto heads” are already armed against the contrary evidence with the all-purpose “liberal bias” attack. “Rush is right,” as the slogan goes, and all those nerdy reporters in the “drive by media” are lying, because they secretly love terrorists. It’s this creepily worshipful, breathtakingly infantile abdication of intellect to a blatantly dishonest hypocrite that makes Limbaugh’s audience so goddamn sad. These pathetic, insecure, failures of men look to Rush as the champion of their impotent rage, helping them to externalize responsibility for their own deficiencies, pinning the blame on those darn liberals and their racial and gender equality.
• 21. Michelle Malkin: Charges: It’s a remarkable achievement in unconscious projection that the author of a book called Unhinged could lose her fucking marbles over a patterned scarf in a donut ad, but that’s what Michelle Malkin did when she sounded the nutbar clarion call and sicced her half-cocked league of masturbators on Rachel Ray and Dunkin Donuts for the flatly absurd notion that they were sending a message of solidarity with Palestinians. Right, Michelle—you just can’t sell donuts without joining the intifada these days. What did the nauseously spunky Ray do to incur the wrath of the Malkinoids? She wore a black and white scarf. A paisley scarf. A scarf that was clearly not a kaffiyeh, which, by the way, is just a hat that Arabs wear, not some universal symbol of jihad. In terms of completely false outrage, the only thing that rivaled this travesty of reason this year was the “lipstick on a pig” metaphor panic. But what puts this embarrassing sham over the top is that Dunkin Donuts actually apologized and pulled the ad, rather than try to explain to the fact-phobic horde that they were just blind, raging idiots with the collective brain-power of a lobotomized howler monkey.
• 50. Barack Obama: Charges: Beyond a few token acts of bipartisan marketing, Barry's major duty in the Senate was to avoid legislating, so he could pretend Washington-outsider status and nullify attacks on his non-existent policy positions. That's the thing about Obama and his candidacy: He was a blank slate, the pinnacle of vapid public relations—onto which the benighted masses may project their sincerest, yet unfounded, hopes in the wake of the worst administration in history. Couldn’t disown Rev. Wright, until he suddenly could, and then marred his first moments as president ahead of time by inviting a pastor whose advice to gays is just to refrain from sex for life. Promised not to run for president, then did; vowed to take public election funds, then didn't; backed telecom immunity, then accepted the nomination at the AT&T sponsored convention; expressed displeasure with Clinton's hawkish foreign policy and vote for war in Iraq, then named her as Secretary of State. And despite all that, he's plenty affable. There's nothing more loathsome than a likable politician.

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Notizie surreali

Qui. Grazie a Luca M per l'hint. Alcuni esempi:

• Parte con venti minuti di ritardo il primo volo della nuova Alitalia. È per abituare gradualmente i passeggeri al cambiamento.
• Obama ribadisce l'intenzione di chiudere Guantanamo, enclave liberticida in uno stato totalitario. Vibrante protesta della Santa Sede: si creerebbe un pericoloso precedente.
• Il governo pone la fiducia sul dl anticrisi: decisione presa "in omaggio alla centralità del Parlamento". È come stuprare una donna in omaggio alla sua femminilità.
• Berlusconi sulla giustizia: "Faremo la riforma anche senza la sinistra". Un po' come si fa con le pippe.
• Onu: "Cessate il fuoco!"Israele: "No"Onu: "Abbiamo fatto il possibile".
• Quasi trecento i bambini uccisi dall'inizio dell'offensiva. Il governo si difende: "Non erano terroristi, ma avrebbero potuto diventarlo".
• Appello di Veltroni: "Mi servono più poteri". Si vede che l'invisibilità non gli basta.
• Bossi frena il premier: "A volte bisogna saper ingoiare". Forse mira alle Pari Opportunità.
• Una domanda per Obama. Ci invadete spontaneamente o dobbiamo proprio rifarlo tutto, il fascismo?
• G8: trovato l’accordo sul clima."Bella giornata, eh?" "Davvero".
• Londra, messo in funzione il computer ideato dai greci 2000 anni fa. Delusi gli scienziati: Youporn gira lentissimo.

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Cafes with professional pets

SiL Rori will love the idea. Check it out.
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Top travel destinations for 2009

According to the NYT (thanks to Nada for sending). I have been to 15 out of 44. Dainlaws will be happy to see that Beirut is Nr 1 (Beirut is indeed wonderful, but please don't go there for the farmers' market, SiL Nadine loves it but you would be disappointed).
However, I don't really trust this ranking. Too many places in the US (10 out of 44, including Dallas and Buffalo!!!), only two in Italy, and only one in France (and it's not Paris, which should be included in any travel list in any time of the year in every year of the last 3 centuries). So, you really think that a Penn farm is better than Paris, or that Buffalo (nr 37) is just a little bit less interesting than the whole of India (Nr 35). Or Dallas better than Rome and the Florida Keys better than Cuba (as if they were even comparable). Las Vegas better than almost anything else!!! Gimme a break!
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Cars and Licenses

Megan McArdle tells us a surreal story about registering her car in DC. I have 3 car/driver's license-related surreal stories. One took place in Italy, one in Baltimore, and one in DC. I'll start with Baltimore.

1. In August 1992 I arrive in Baltimore to start graduate school.
   
2. In September 1993 I find out that I passed my comprehensive examinations and decide that I need a US driver license. I take the following steps: (i) Obtain a US social security number; (ii) Attend the required course on the dangers of DUI (the other attendees were 16-year old kids and repeat offenders) (iii) Take the law test; (iv) Rent a car, drive to DMV with my Italian license, take the driving test, and obtain a driver's license.
   
3. So far so good.
   
4. After a few months I realize that I cannot afford buying a car (the insurance is too expensive) and I decide to buy a motorcycle (Suzuki 500). This is where the surreal part of the story starts.
   
5. I go to DMV to take the motorcycle law test and I am told that I cannot take it because I have an unpaid speeding ticket from Florida dated sometimes in 1991. I tell the DMV employee that I moved to the US in 1992 (so, how could I have a ticket dating 1991) and that a few months before they gave me a car driver's license without any problem. She answers that the other time they did not do a background check because it was my first US driver's license?? Anyway, I find out that it is easier to pay than to argue against the ticket. So, I send a $50 check to Florida, I get a letter saying that I am clear, and I take my law test.
   
6. Two weeks after I go to take my driving test. The employee asks: "How did you come here?" I reply: "with my motorcycle." He tells me that I did something illegal (and thus I cannot take the test) because I don't have a motorcycle driver's license. So, I show him my Italian license (this is the same thing I did when I took the car exam). He says: "Sorry sir, I don't speak Italian." I tell him that they accepted the Italian license when I took my car test and he replies that they assume that all licenses are good for cars, but motorcycles are a different thing. I tell him: "look at my license it says: "autoveicoli e motoveicoli," even though you don't speak Italian, you can recognize the root of the words auto-vehicle and motor-cycle." He repeats: "Sorry sir, I don't speak Italian."
   
7. What should I do? He says that I have 3 alternatives: (i) go back with somebody who has a motorcycle license; (ii) go to court and have my Italian license translated into English; (iii) go back with the motorcycle loaded on a truck (note that the motorcycle was already there!).
   
8. Since I didn't know anybody with a bike license and I had no intention of going to court, I went to U-Hual and rented truck with a ramp to load my bike. However, I didn't have anything for tying the bike inside the truck and as soon as I left the parking lot the bike fell. So, I parked again, rode the bike to the parking lot of DMV, took a taxi back to where I had parked the truck, drove the truck to the parking lot of DMV, loaded the bike on the truck, called the DMV employee and showed him the bike inside the truck (of course two hours before he had seen me there riding the bike). He told me to download the bike and he let me take the exam.

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Madoff and the regulators

He was very close to them (his daughter married one), this is probably why nobody listened to this guy. (the story is here) Thanks to KV via MH.

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Dress etiquete to catch a plane?

Here

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Fabrizio De Andre'

passed away ten years ago (January 11 1999), I still remember when I sent the email to Pask. The FT has a nice article that, among other things, wonders why De Andre’ is not as well known outside Italy as he is in Italy (the article starts like this: Sunday marks 10 years since the death of one of the greatest singer-songwriters of the 20th century: Fabrizio De André. Almost completely unknown in Britain, in Italy he is revered as a prophet and enjoys an evangelical following.)

Tonight at 10:40 PM RAI 3 and more than 150 radio stations will broadcast at the same time one of his songs: Amore Che Vieni Amore Che Vai.

Here are a few other songs (more or less in chronological order): Via del Campo, La Canzone di Maggio, Un Giudice (Cosa vuol dire aver un metro e mezzo di statura...), Creuza de Ma, Don Raffae’ (with Roberto Murolo).
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Famous friends: Alejandro Gaviria

I have many friends who have become important and influential in their own countries (I guess that this is another sign of my own failure). I recently talked with two of them who share a great ability for intelligent, witty, and irreverent writing. However, these two friends differ in one fundamental trait. The first (who shall remain unnamed) decided to put his considerable skills at the services of his country's most powerful figure. The second is Alejandro Gaviria.

Alejandro (who was my colleague at the IDB between 1998 and 2000 and he is now the Dean of the economic school at the Universidad de los Andes) is an amazing guy (he's also the person who introduced me to aguardiente, but I am not sure I should thank him for that). He can do high tech economics but he can also write in non-Greek English and Spanish and even publish articles in literary journals. He could have sat on a series of comfortable government positions, but he decided to act as the conscience of his country and criticize Colombia's most sacred cows, from the very popular president (but I guess he's not among the delirious or obtuse people who criticize the president) to the country's most famous scientist.

So, I was very happy when Alejandro told me that he regularly checks No Original Content.
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Raghu Rajan is a very smart guy

In 2005, he was heavily criticized for writing: If banks also face credit losses and there is uncertainty about where those losses are located, only the very few unimpeachable banks will receive the supply of liquidity fleeing other markets. If these banks also lose confidence in their liquidity-short brethren, the inter-bank market could freeze up, and one could well have a full blown financial crisis.
Paul Krugman has more on the same paper.
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Paul Krugman is looking for a word

Here.
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Winning the Nobel

While writing this post I had a more general thought about Nobel Prize winners. It is a bit funny that after one wins the Nobel in a given field he/she seems to assume enough authority to make statements (either good or bad) about matters that are completely unrelated to the field for which he/she won the Nobel.
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Harold Pinter

Harold Pinter passed away on December 24, 2008. This is his 2005 Nobel Lecture. The Lecture contains several exaggerations and I don't share Pinter's enthusiasm for the Sandinistas (even though this is one of the best albums ever). But the beginning is very nice:
'There are no hard distinctions between what is real and what is unreal, nor between what is true and what is false. A thing is not necessarily either true or false; it can be both true and false.'
I believe that these assertions still make sense and do still apply to the exploration of reality through art. So as a writer I stand by them but as a citizen I cannot. As a citizen I must ask: What is true? What is false?
Truth in drama is forever elusive. You never quite find it but the search for it is compulsive. The search is clearly what drives the endeavour. The search is your task.

This is somewhere in the middle:
As every single person here knows, the justification for the invasion of Iraq was that Saddam Hussein possessed a highly dangerous body of weapons of mass destruction, some of which could be fired in 45 minutes, bringing about appalling devastation. We were assured that was true. It was not true. We were told that Iraq had a relationship with Al Quaeda and shared responsibility for the atrocity in New York of September 11th 2001. We were assured that this was true. It was not true. We were told that Iraq threatened the security of the world. We were assured it was true. It was not true.
The truth is something entirely different. The truth is to do with how the United States understands its role in the world and how it chooses to embody it.

And this is towards the end of the lecture (thanks to Raja for sending it):
I know that President Bush has many extremely competent speech writers but I would like to volunteer for the job myself. I propose the following short address which he can make on television to the nation. I see him grave, hair carefully combed, serious, winning, sincere, often beguiling, sometimes employing a wry smile, curiously attractive, a man's man.

'God is good. God is great. God is good. My God is good. Bin Laden's God is bad. His is a bad God. Saddam's God was bad, except he didn't have one. He was a barbarian. We are not barbarians. We don't chop people's heads off. We believe in freedom. So does God. I am not a barbarian. I am the democratically elected leader of a freedom-loving democracy. We are a compassionate society. We give compassionate electrocution and compassionate lethal injection. We are a great nation. I am not a dictator. He is. I am not a barbarian. He is. And he is. They all are. I possess moral authority. You see this fist? This is my moral authority. And don't you forget it.'
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