Wednesday, February 29, 2012

Research findings - on research!

Readers of this blog will be aware of my skepticism regarding "science", "research", and so on

Therefore I could be expected to be pleased to read the results of RESEARCH (!) that "proves" that research is not always reliable:

However, as this is a piece of research, how do we know whether these researchers too have not deluded themselves?! :) Sphere: Related Content

Ambassador Dr. Benoît Girardin's book: Ethics in Politics Why it matters more than ever and how it can make a difference

Ambassador Dr. Benoît Girardin's book: ETHICS IN POLITICS: WHY IT MATTERS MORE THAN EVER AND HOW IT CAN MAKE A DIFFERENCE is the latest publication in the Focus series from, the global network on ethics, which is based in Geneva.

The launch event is on Thursday 8 March at the Ecumenical Centre, Salle 2/3
150 Route de Ferney, Grand-Saconnex, Geneva from 12:30-13:30 (with Snacks: 14:00)

Moderated by Prof. Dr. Christoph Stückelberger, Executive Director and Founder of, the launch event features speeches also by Ambassador Walter Fust, President of the Board of the Foundation (who will Present the Declaration for Ethics in Politics) and Dr Colum de Sales Murphy, President of the Geneva School of Diplomacy and International Relation (who will comment on the book and the declaration, as well as the challenges of “ethics in politics” in the training and development programmes for diplomats).

The author of the book, Ambassador Benoit Girardin, worked for many years at the Swiss Ministry for Foreign Affairs (for example, as Ambassador in Madagascar and Delegate of Development Cooperation in Romania, Pakistan, and Cameroon). He is a lecturer in ethics, political philosophy and international relations at the Geneva School of Diplomacy and International Relations.

Ambassador Walter Fust was Ambassador, served in many high level functions for the Swiss Government, and was for a long time the Director General of the Swiss Agency for Development and Cooperation.

Dr. Colum de Sales Murphy, served in the field of peace negotiations for the United Nations and the European Union and in several wars, among others in Bosnia. He founded the Geneva School of Diplomacy in 2003.

The invitation to the launch event says, among other things>

"The book and the declaration are an affirmation: Yes, ethics in politics is possible – and it pays off. It is not a naïve dream. The declaration includes “Principles of using power” and “Cardinal ethical values in politics”. The declaration and the book adopt a pragmatic approach, testing whether and how value-orientation can make a difference in politics. The book singles out four ethical values as fundamental: limitation of power, effectiveness, accountability and justice. It develops a global and inter-cultural perspective and presents practical cases, with criteria for dealing with dilemmas, based on (real life) experiences.
In a globalised, interdependent world of pluralistic societies, ethics in politics becomes a global ethics in politics which reflects the commitment of". Sphere: Related Content

Saturday, February 25, 2012

Millenarianism versus Lutheranism and Calvinism (and the parallel with Vedanta in the case of India)

At an academic conference the other day, it struck me that the fascination with Millenarianism in academic work is a way of focusing on the quirky and the extreme in order to avoid confronting in theoretical work the massive and indeed fundamentally transformative impact of Lutheranism and Calvinism.

This is somewhat parallel to the way in which an obsession with Vedanta comes in the way of adequate study of the other 5 branches of "modern orthodox" Hindu philosophy, let alone of Assertive, Dalitbahujan, Shakta, Vashnava, Vedic and other schools and spiritualities. Sphere: Related Content

Sunday, February 19, 2012

Visit to musical Estonia

I've just returned from a week of lectures and meetings in Tartu (at the University) and Tallinn.

This was my first-ever visit to the country, and was part of the programme for Heartbeat Tallinn (

Freezing weather right now but lovely people, and I can imagine that, once the entire country starts blooming in the Spring, it must be stunningly beautiful through to the Autumn.

I was prepared for the worst of Eastern European type food, specially for a vegetarin asuch as myself, but it surprisingly has excellent food, even for a vegetarian.

Nowadays, as my wife is able to join me on some of my excursions around the world, she enjoyed the oldest medieval town centre in the world, and the excellent handicrafts (I was able to join her briefly during a break from work on one afternoon).

Quality versus price probably the best in the world.

Certainly for everything to do with linen and wool, she says.

What were my lecture topics?:
- "The Current Global Crisis: Why Was Getting Here So Easy and Why Is Getting Out So Hard?"
- "Contemporary Changes and Timeless Values: The Challenges of Business Ethics in a Globalising World"
- "Why Businesses Don't Prosper: The Most Common Reasons"....

At the Economics Seminar, where I spoke on "Business Conduct: The Role of Traditions, Religions, Values and Ethics", it was most interesting to hear Hardo Pajula, the well-known SEB Economist on "The Effects of the Loss of Transcendence on the Contemporary State", and Professor Meego Remmel on "Integrity As A Complex Virtue".

For the ensuing panel discussion, chaired by Janek Mäggi, CEO of Powerhouse, we were joined by the Estonian political analyst, Ahto Lobjakas.

I was inspired by watching the 2006 film "The Singing Revolution" on how this tiny nation of 1.3 million people, without firing a single shot and without shedding a single drop of blood, became the first country to declare independence from the USSR, to be followed by mighty Russia and other countries, thus ending the USSR.

Why was this small group of people able to do all this?

Extraordinarily, because of the power of music to hold the country together through 50 years of Soviet "Russification" and earlier years of Nazi oppression.

I'll be happy to return to Estonia any time.

If you don't know the country, it is definitely worth a visit.

And, if you are planning to visit, try to time it during the high week of Heartbeat Tallinn, which will be July 24 to 29 this year. Sphere: Related Content

Saturday, February 04, 2012

Why did Russia and China veto the UN resolution against Syria's Bashar?

Russia and China have, as expected, vetoed the U.N. draft resolution backing the Arab plan calling on Syrian President Bashar al-Assad to resign.

Why have Russia and China done so? Because birds of a feather flock together -robbers, thieves and murderers have to support each other.

The Russiana nd Chinese regimes fear that if such a resolution goes from the UN re Syria today, it could come from the UN to Russia or China tomorrow.

Further, Russia and China calculate (correctly) that vetoing the UN resolution will make them closer friends with Syria while Bashar's regime lasts.

The question is how long the regime will last.

And the problem with such realpolitik-based decisions is that whenever the Bashar regime falls, Russia and China will find themselves the more firmly and completely out of Syria.

The US was apparently "disgusted" by the vetos. But what did it expect? Russia and China should never have been admitted to a body whose basic values and constitution they do not respect. Sphere: Related Content

Crunch time for Greece - and for the EU - and indeed the world economy

The current state of play is at:

so the question is whether Greece will pass the needed legislation by the end of this month

somehow, I think they are going to continue prevaricating till the last minute

and then we will see whether they do get the legislation through

I think that then they will because they have to - the alternative (bankruptcy) will be even worse for them

However, I regret I don't know Greek culture well enough to be able to say whether they belong to that class of people who are prepared to disadvantage themselves in order to do harm to someone else.

If Greece does go into default at the end of this month, expect the Euro to go into a tailspin (so far as markets are concerned - the Euro will recover, but it will be considerably damaged and weakened), and expect a concomitant impact on the world economy.

If Greece does put the required reforms in place, then expect possible political and social upheaveal in Greece, but an uptick in the Eurozone as well as in the world economy. Sphere: Related Content

Friday, February 03, 2012

A contrasting view of China

I always try to be fair and objective.

So here's a view of China that contrasts with mine.

It is from the highly qualified director in McKinsey's Shanghai office, Gordon Orr Sphere: Related Content

Thursday, February 02, 2012

prognoses and prescriptions for the year

If you bothered to read the text of the speech which I was invited to deliver in the Autumn at the Arizona Council on Economic Education, you will not have been surprised at the upturn in the US economy since then: US economic data has performed in line with my expectations and ahead of what was generally expected. As a result, stock markets are generally up, and even European sovereigns have borrowed money successfully in spite of the propaganda barrage against the Euro emanating from the US, with consequent fears about the Euro on the part of the deceived or ignorant.

In that speech, I pointed out that the biggest factor holding back the US economy was lack of confidence.

That lack is primarily due, I said, to uncertainty regarding the rules of play. The result is that big companies are still reluctant to hire, and have huge amounts of cash doing little (though some smaller companies have begun to move). Purchases of capital goods are stalled even though the cost of borrowing is so low, presumably because of expectation that prices will fall lower. Consumers are not splashing their money about either.

In a more recent post, I pointed out that people were paying the Governemnt of Denmark to keep their money for them. This is also true of US, where 10-year indexed bonds are at present losing investors about 15 basis points.

In other words, some investors are putting at least part of their money to the most secure place they can, because they think they will lose MORE money by putting their money elsewhere.

In Britain, the situation is even worse: some people are giving at least part of their money on a loss-making basis not for 10 years but for 30 years.

So, is real growth going to resume this year? Am I right or are the doomsayers right? Actually, both are right. The economy IN THE U.S. has begun to turn around BUT everyone knows that is not because the basic issues have been addressed. Nor is it because the ground rules are now clear. It is only because money has flowed back to safe havens from emerging markets since the Autumn.

The good news, for the US, is that money will continue to flow back to the US (though of course there will be blips along the way).

The question continues to be how well the US will use this opportunity. At present, I see little sign that the US is using the opportunity well.

However, as long as the US does not do anything silly, the opportunity will continue to be open - at least till the next set of elections when an improving economy will help the Democrats, though a long period of only slow improvement, if it makes America impatient (and America is probably the most impatient country in the world), may make the election anti-incumbent. I suppose the outcome depends on the extent of the recovery in the US, as well as on what hits the world and the responses to those hits (foreseeably in relation to China and Iran at present, though there are always unforeseeable things). Sphere: Related Content

What China will do next to try to shore up its ailing economy

Zhu Baoliang, chief economist at the State Information Centre, a government think-tank, has apparently signalled the probability that China will cut taxes and slash banks' reserve requirements to try to support slowing economic growth

As the regime is flush with cash (at least as far as we know), cutting taxes is a smart move.

However, reducing banks' reserve requirements is a palpably false move since there is already a lot of bad debt in the system, and such a move will make it worse - and thereby make Chinese banks even more vulnerable than they already are.

As growth declines to 8% or less, a lot more capital will flee China - making the situation even more difficult for China to handle. Sphere: Related Content

The state of play regarding one key aspect of reforms that would provide a basis for growth

One of the key factors strangling growth at present is that the basic rules of play are not clear.

I hailed the Dodd-Frank Act as providing one such basic rule of play, on the basis of which growth could be soundly resumed.

But as its requirements have played out there has been intense action against each of those requirements by exactly the organisations that created the crisis.

Occasionally, I have commented on the tussle between those who want to implement the requirements of Dodd-Frank in the spirit in which they were intended and those who would like to dilute them as far as possible.

The current state of play regarding the key matter of the Volcker Rule is at:

The crux of the matter is that all the struggles since then, and all the compromises and exceptions that are now being included, which have resulted in the 298 pages of the current version, have apparently (and predictably) simply muddied the waters.

In general, the longer the draft of a regulation, the more exceptions it is trying to allow while also trying to safeguard at least something of the letter of what was originally proposed.

All that fudging ends in - guess what? - a fudge.

According to the Reuters report to which I refer above, "the divide comes down to a natural tension between attorneys writing the comment letters and traders whose activities will be curtailed". The point of the Volcker Rule was precisely to curtail those activities.

Further, the report says the split is about "the best approach to make sure the ban on proprietary trades doesn't also capture trades that banks make for their customers' benefit, known as "market making", or firms' own portfolio hedging". The Volcker Rule was clear that banks should not be making trades for customers' benefit (that should be done by other entities).

And hedging a portfolio is a bit of nonsense.

The portfolio is itself meant to spread (or hedge) risk. If that does not spread the risk sufficiently, something is wrong with the portfolio, and it is in principle wrong to then go to someone else to try to take whatever risk is there in that portfolio off you.

Portfolio managers are supposed to be paid for their expertise in spreading risk by portfolio methods.

If the managers are not good enough, they should be fired - not insured.

If you do not fire incompetent portfolio managers but seek to insure them instead, you are asking an insurance company, which does not know the portfolio intimately, to second guess someone who does know the portfolio intimately.

In principle, only an idiotic insurance company would take on such insurance.

Yet we know that insurance companies DO take on such insurance - on very large scales. And when you think of such insurance companies, remember AIG.

In America, the favourite way of avoiding genuine debate is by labelling something "communist" or "leftist".

The reporter gives away Reuters' bias by saying that the Volcker Rule was "hailed by leftists" and goes on to say: "the Volcker rule has been excoriated by the right, who warn it could take liquidity out of the market and make it hard for firms to raise capital". That was, and is, the whole point of the Volcker Rule.

Difficult as it is to think about this in the current state of the global economy, there are some kinds of liquidity that are bad.

And certain kinds of firms should not be able to raise capital too easily.

The scale of the bust was primarily because too much capital was going into speculation. Not enough capital was going into productive uses.

Capital should go to productive uses, not to speculative uses.

In other words, production should be favoured over gambling.

That is essentially what the Volcker Rule is about.

If we want to take back Capitalism from Casinoism, then it is critical to back the Volcker Rule, not fudge it.

If the regulators proceed to incorporate the sort of "discretion" that is being suggested, to be exercised by the entities that created the crash, then it is clear what will happen soon enough - another crash. And an even bigger crash. Sphere: Related Content