Thursday, September 28, 2006

Milton Friedman and George Stigler

I would file this under the best lines I have read today category except that the line comes from letters by G. Stigler to M. Friedman:

"It may merely be prejudice, but I'm inclined to write him [Samuelson] off as an economist."

"Of the many speakers only one was terrible -- shallow and pretentious, Joe Schumpeter."

I got this from the book review of the new book Making Chicago Price Theory: Friedman-Stigler Correspondence, 1945-1957 by Craig Freedman at EH net, read the review here.

Thanks to Peter Klein at Organization and Markets for the pointer.

Friday, September 22, 2006

Another Reason for HK's Decline

HK's deposit insurance scheme will be launched next week, read more here.

Do we need such a scheme now? No.

Reason for your opposition? According to a new World Bank study, cross-country empirical research and individual-country experience confirm that, for at least the time being, officials in many countries would do well to delay the installation of a deposit insurance system. Here is the paper.

Tuesday, September 19, 2006

Best Line I have Read Today

"I almost died when for a year and a half we had to pretend we were governing...Instead, we lied morning, evening and night."

Ferenc Gyurcsany, Prime Minister of Hungary

Fischer Black

Here is David Warsh on Fischer Black.

This is the best part:

A few months earlier, while having trouble fastening the collar button of his shirt, he had joked with his wife that perhaps the problem was a tumor. Instead of going to doctor, however, he plunged into reading up on the possibilities -- "research," he called it. And when he finally got the diagnosis of the throat cancer that soon would end his life, Mehrling relates, "he burst into spontaneous laughter."

Revealed Preference

"千萬不要去 Sentosa, 那裏連海洋公園都不如。" 一位香港女生對她友人說。

Oh yeah, if she really thinks so negatively about Singapore, why bother? She must be lying.

How do I know? The answer is in the title of this post: revealed preference.



"爸, 起飛了, 真刺激" 洋興奮地說。


"為何不等Anna回來才去?" 岳母帶疑惑地問。

實情是這次 Sentosa 之旅不單為了洋,也為自己。 be continued, or may be not.

Best Line I have Read Today

"If only GDP were proportional to literary talent, the Russians would be the richest people on earth."

That is from Econlog's Brian Caplan

Wednesday, September 13, 2006

Best Lines I have Read Today

"Climate statistics show that, with all the "global warming" hysteria today, our temperatures are still not as high as they were back in medieval times. Those medieval folks must have been driving a lot of cars and SUVs.

Doing 90 percent of what is required is one of the biggest wastes because you have nothing to show for all your efforts. But doing 110 percent of what is expected is one of the smartest investments because it can pay off with a big reputation for just a little more effort.

For university presidents, as for politicians at all levels, one of the most valuable talents for the success of their careers is the ability to say things that make no sense, with a straight face and a lofty tone. "

They are all from Tom Sowell, read more here.

Hat tip to Stationary Bandit for the pointer.

Tuesday, September 12, 2006

Do Your Math

WSJ wrote: "The nation's math teachers, on the front lines of a 17-year curriculum war, are getting some new marching orders: Make sure students learn the basics.

In a report to be released today, the National Council of Teachers of Mathematics, which represents 100,000 educators from prekindergarten through college, will give ammunition to traditionalists who believe schools should focus heavily and early on teaching such fundamentals as multiplication tables and long division." Read the whole story here.

One motive for this change in the math curriculum is apparently the low scores American kids get in interntational math competition. But the important question is, does it matter? Will the economic might of the US inevitably be eroded because the "wrong" kind of math is taught to its kids ?

If you trust what Gary Becker and Dick Posner have to say on this issue, the bottomline is: It doesn't matter.

Monday, September 11, 2006

Read My Lips

Today's SCMP reported "Donald Tsang Yam-kuen yesterday declared the end of "positive non- intervention", a policy that has previously been hailed as a pillar of Hong Kong's economic success...."Everybody says Hong Kong has a `positive non-intervention policy'. The policy was put forward a long time ago by a financial secretary, Sir Philip Haddon-Cave."

The story continued,"All along, we have never said we'd made it a blueprint for our economic development," Mr Tsang said in response to a question on whether the administration had adjusted the policy."What we have done in practice - and if you remember the direction outlined by former financial secretaries - is adhere to the principles of `big market, small government'. The government will try our best to meet the market's needs." Asked why the policy was still taught in schools, Mr Tsang said: "They teach it wrong." " Read the story here.

Oh really?

Here is Donald Tsang again in his 2000 budget speech (paragraphs 17-19):

"Market-led means that Government does not seek to direct or plan the course that our economy or markets should take. Instead, we believe that investors and entrepreneurs understand markets far better than officials and that private initiatives are a surer way to build Hong Kong's prosperity than any bureaucrat's blueprints.

Our economy has transformed itself several times over the last 50 years. Every time one door closed, a new one opened leading to bigger and better opportunities. Through their own initiatives, our talented and hard-working people have managed to create these new opportunities for growth. The Government has had the good sense not to try to usurp the business sector's role, nor to seek to direct economic developments. Instead, it has confined itself to creating the conditions that allow individuals and businesses to flourish. We started out as a modest trading port, which our people then transformed into a manufacturing centre. They developed global trading links. They ventured into the Mainland. They built Hong Kong into a world-class financial centre. And now, again driven by market forces, they are seizing new opportunities in cyberspace.

None of these successful transformations was the result of government planning or directing the economy. This lesson from the past must be the guiding principle for anyone entrusted with the management of Hong Kong's economic affairs."

Hat tip to Wai-hong Yeung at the Next Media for reminding me of these passages during our conversation.

Wednesday, September 06, 2006

Collected Works of Armen Alchain

Liberty Fund just announced that it will publish a two volume set of Armen Alchian's scholarly papers later this year.

Armen, of course, is one of the major contributors to the economic approach to property rights, theory of money, theory of unemployment, transaction cost economics, and the theory of the firm. He is also the thesis adviser of Steven N.S. Cheung, another important figure in the development of transaction costs economics.

Believe it or not, my guess is that more students here in Hong Kong have heard about Armen's name than their US counterparts. Why? Because Armen's text (co-authored with Bill Allen also at UCLA) Exchange and Production has been adopted as the required text for economics in our college entrance exams.

When I studied in the US, I was quite surprised when another student of Alchian's at UCLA, Walter Williams used the same book as the text for first year Ph.D. Micro.

Global Financial Warriors

John Taylor, Mary and Robert Raymond Professor of Economics at Stanford and Senior Fellow, Hoover Institution has a new book due out in Jan next year.

The title of the book is "Global Financial Warriors" and more info about the book can be found here.

Tuesday, September 05, 2006

I would file it under Political Joke of the Day except that...

A couple of weeks back, vice-chairman of the Democratic Party (part of the pro-democracy camp here in HK) Albert Ho was attacked by a few persons. Read the story here. His party's chairman, after visiting Ho, allegedly said "Ho was beaten up like a 'Pig Head"" when describing his colleague's condition to the press. For readers unfamiliar with Cantonese, being called by somebody as "Pig Head" is ususally treated as an insult. If the allegation were true, wasn't it strange that the chairman use that term to describe his colleague?

Just hope that US Vice President Dick Cheney did not call his buddy a "Human Beehive" when he accidentally shot him while hunting. Read it here.

Hong Kong in Decline

While HK is busy with debating whether we need to have sales tax, minimum wage, maximum working hours, more active government involvement in industry...Singapore has quietly stolen HK's place in the World Bank's Doing Business ranking this year.

Read the WB report here.