Tuesday, September 30, 2008

America's Most Stressful Cities

This kind of statistics is one that I like. When I read the following article, I felt that we Japanese and Americans had the same problem to live in a big city.

Here's the excerpt:

Maurna Desmond, Forbes.com, Sep 16th, 2008

Chicago's rising unemployment rate, expensive gas, high population density and relatively poor air quality create a perfect storm of stress, according to measures we used to calculate the country's anxiety hot spots.

New Yorkers can relate, though. Locals in the country's most densely packed metro have to fiercely compete for subway seats, cabs, apartments, elite preschools, dinner reservations and bartenders' attention. This constant grind compounds the area's other anxiety factors including costly housing (the country's third least affordable) and allergy-inducing pollution. Throw in Wall Street's woes, and you've got a Molotov cocktail of concern.

Detroit, Mich., Los Angeles, Calif., and San Francisco, Calif., ranked third, fourth and fifth, respectively.

Behind The Numbers

To find them and others, we examined the country's 40 largest U.S. Census-defined metropolitan statistical areas and looked at quality of life indicators. We tracked housing affordability based on the August 2008 National Association of Home Builders/Wells Fargo housing opportunity index and unemployment rates for the same month based on data provided by the Bureau of Labor and Statistics. We also worked cost of living into our ranking by factoring in the price for one gallon of gas on Sept. 4 per a daily survey conducted by insurance company AAA.

But consumers aren’t fretting about these pressures in a vacuum. A city’s environment can play a big role in how its citizens are able to cope with stress.

In order to capture the way a city’s environmental factors can impact nerves we looked at 2007 air quality using air monitoring data that states submitted to the U.S. Environmental Protection Agency (EPA) from 2003-05. Then we pulled the number of sunny days per year using 2007 data furnished by the National Environmental Satellite, Data and Information service. Finally, we looked at population density based on 2007 data furnished by the U.S. Census Bureau to find the cities most squeezed for livable space.

What's Causing Constant Worry

Though "stress" was first used by endocrinologist Hans Selye in 1936 to mean "the non-specific response of the body to any demand for change," it has since become a catch-all for anything that causes one angst. Antidotes for its toxic effects have spawn several cottage industries from high-end spas and snake-oil supplements to the brands of self-help gurus such as Australia’s own ‘Rhythm of Life’ pontificate, Matthew Kelly.

But Selye’s observation about the role of change in stimulating stress was spot on. Residents of the cities on our list acutely experience the shifts wrought by global and local economies in turmoil. In fact, it's “bedrock security issues” like housing affordability, job security and cost of living drive anxiety, says Edward Hallowell, M.D., a former professor at Harvard Medical School and founder of the Hallowell Center for Cognitive and Emotional Health in Sudbury, Mass. Nowhere is that felt more than in the Windy City. Chicago has a 7.3% unemployment rate, the eighth most polluted air in our ranking and in city where everybody drives to get around, a gallon of gas costs a nickel under $4 dollars.

Individuals living in Los Angeles experience a 7.5% unemployment rate and the second least affordable homes relative to income in the country. The metro features the worst air quality in the country; indeed, Angelinos often need to stay in doors when the smog gets really bad. Throw in the country's seventh highest gas prices and this car-dependent city has a lot stress about.

It's not much better further North. Drivers in the San Francisco metro pay the more per gallon of gas than anywhere else in the country. Tack in 359.8 housing units per square mile, the ninth highest population density of the 40 major metro areas we looked at, and you’ve got a recipe for anxiety.

Rust-belt cities Detroit and Cleveland have high rates of unemployment due to the decline of the American auto industry, and they have nasty pollution problems as a result of it. On the upside, the flight from these cities has meant a fall in home prices, which is good for prospective, if only a few, home buyers.

At No. 6, San Diego was the most unexpected city on our list. How could a laid-back beach town be stressful? Well, it's got the fifth least affordable housing of the 40 major metro areas surveyed, a 6.4% unemployment rate and car-happy residents paying $3.81 for a gallon of gas. But, they don’t let those numbers get them down. Pleasant weather and beautiful beaches contribute to a serotonin-soaked attitude that appears to take the edge off of tough times.

Sane Stress

Hallowell says that some stress, abundant in these human bee hives, can be a good thing. It can boost productivity (think Michael Phelps on a starting block), which leads to self-satisfaction and peace of mind.

When you are feeling anxious, Hallowell recommends reaching out to friends and family because “maintaining these strong relationships is key in our very crazy-busy disconnected society.”

Sunday, September 28, 2008

The Best Cities For Singles(USA)

Another interesting article:

Atlanta tops our annual ranking of America's best places to live on your own.

For the first time ever, Atlanta tops our list of the best cities for singles. The capital of Georgia and home of Coca-Cola earns the top slot because of its hopping nightlife, relatively high number of singles and sizzling job growth.

To those who know "Hotlanta," the ranking should come as no surprise. In the eight years that we have been ranking America's largest urban areas in terms of their friendliness to the nation's 74 million single adults, only once did Atlanta place outside the top 10.

To determine which U.S. cities are most comfortable for soloists, we ranked the 40 largest urbanized areas in mainland America in seven different categories: number of singles, nightlife, culture, cost of living alone, job growth, online dating activity and coolness. To determine a city's cool factor, we partnered with Harris Interactive, who conducted a poll, asking, "Among the following U.S. Cities, which one do you think is the coolest?"

Last year's winner, San Francisco, came in second this year, scoring particularly high in coolness (third out of 40) and culture (fourth). Overall, the coolest city was New York, while Midwestern fly-over cities like Indianapolis (40th) and Columbus, Ohio, (35th) did poorly on the Harris poll.

Overall, New York ranked as only the eighth-best place for would-be lovers. In addition to its top score in coolness, the Big Apple was ranked as the city with the best nightlife and the third-best cultural resources. But young singles need to eat as well as party, and New York scored dead last in the cost-of-living category. The city also placed a mediocre 29th in terms of job growth. Economic factors have always kept New York out of the top spot on our list.

The nation's second-largest city, Los Angeles, came in 16th this year, a precipitous drop from its third-place finish in 2007. Blame the cost of living in sun-drenched SoCal and a lackadaisical online dating culture.

Jacksonville, Fla., ranked dead last this year, scoring poorly in all categories except online dating, where it ranked seventh. Providence, R.I., last year's loneliest city for singletons, fared better, tying with Memphis, Tenn., and Cincinnati, Ohio, for 33rd place. Religious Salt Lake City, a perennial at the bottom of our list, comes in 39th this year. Mormonism's hometown is penalized for its lack of available singles (39th), dismal nightlife (39th) and its square image (coolness: 38th).

Some surprises: Orlando, Fla., which had never placed in the top 10 before, came in ninth place. Minneapolis-St. Paul hadn't made the top 10 since 2002 but came in third this year. The Twin Cities scored well in culture (ninth) and online dating (sixth) and ranked surprisingly high in coolness (eighth). Perhaps some respondents thought the Harris poll was asking about the weather.

Our rankings are meant to be a guide for young, ambitious singles who, in an age of techno-mobility, can live and work wherever they want. Our methodology focuses on career-minded, "never-marrieds" under the age of 35. Older singles, divorcees, widows and widowers might find slightly different criteria more relevant to them.

Most Secure U.S. Places

This is the interesting article that I saw today in YAHOO!

Here's the excerpt:

Health, prosperity, safety and security are all desirable aspects when it comes to seeking a place to live, work or raise a family. According to our fourth annual Most Secure U.S. Places to Live rankings from Farmers Insurance Group of Companies®, the city that best meets those qualifications is Corvallis, Ore.

The rankings took into consideration crime statistics, extreme weather, risk of natural disasters, environmental hazards, terrorism threats, air quality, life expectancy and job loss numbers in 379 U.S. municipalities. The study divided the communities into three groups: large metropolitan areas, mid-size cities and small towns.

Corvallis is the fourth different city in four years to earn top honors in the Farmers study. The leading communities in the three previous studies were: the Provo-Orem, Utah, area in 2004; the Richland-Kennewick-Pasco area of southeast Washington in 2005; and St. George, Utah, in 2006.

Top-ranked Corvallis, whose population of 81,105 places it among the small towns, is nestled in the heart of Oregon's Willamette Valley and is home to Oregon State University. In 2006, Corvallis was honored as only the third U.S. city at that time to meet the EPA's challenge to become a Green Power Community. Corvallis' low crime rate and negligible threats of extreme weather, environmental hazards and terrorist threats led to its No. 1 ranking in the 2007 Farmers study.

The San Jose-Sunnyvale-Santa Clara area in northern California's Silicon Valley tops all large metropolitan areas (population of 500,000 or greater), scoring particularly well in the extreme weather and terrorist threats categories. The area is considered one of the leading research and development centers of the world; in 2005, San Jose and Sunnyvale ranked first and second in the number of utility patents filed in the U.S.

Olympia, Wash., is the most secure mid-size city (population between 150,000 and 500,000). The state capital has become a hub for artists and musicians. The extremely clean air and the long life expectancy of Olympia's residents aided its lofty ranking.

Large Metro Areas (500,000 or more residents)

1. San Jose-Sunnyvale-Santa Clara, Calif.

2. Boise City-Nampa, Idaho

3. Bethesda-Gaithersburg-Frederick, Md.

4. San Francisco-San Mateo-Redwood City, Calif.

5. Oxnard-Thousand Oaks-¬Ventura, Calif.

6. Bridgeport-Stamford-Norwalk, Conn.

7. Nassau County-Suffolk County, N.Y.

8. New Haven-Milford, Conn.

9. Lake County, Ill./Kenosha County, Wis.

10. Honolulu, Hawaii

11. Portland-South Portland-Biddeford, Maine

12. Cambridge-Newton-Framingham, Mass.

13. Edison, N.J.

14. Portland-Beaverton, Ore./Vancouver, Wash.

15. Santa Ana-Anaheim, Calif.

16. Madison, Wis.

17. Seattle-Bellevue-Everett, Wash.

18. Rochester, N.Y.

19. Syracuse, N.Y.

20. Essex County, Mass.

Mid-Size Cities (150,000 - 500,000 residents)

1. Olympia, Wash.

2. Rockingham County-Strafford County, N.H.

3. San Luis Obispo-Paso Robles, Calif.

4. Sioux Falls, S.D.

5. Bellingham, Wash.

6. Fargo, N.D.

7. Naples-Marco Island, Fla.

8. Las Cruces, N.M.

9. Lancaster, Pa.

10. Bremerton-Silverdale, Wash.

11. Binghamton, N.Y.

12. Lynchburg, Va.

13. Burlington-South Burlington, Vt.

14. Rochester, Minn.

15. Santa Barbara-Santa Maria, Calif.

16. Charlottesville, Va.

17. Santa Rosa-Petaluma, Calif.

18. Salinas, Calif.

19. St. Cloud, Minn.

20. Medford, Ore.

Small Towns (Fewer than 150,000 residents)

1. Corvallis, Ore.

2. Harrisonburg, Va.

3. Ithaca, N.Y.

4. State College, Pa.

5. Logan, Utah

6. Lewiston, Idaho

7. Bismarck, N.D.

8. St. George, Utah

9. Napa, Calif.

10. Bend, Ore.

11. Wenatchee, Wash.

12. Mount Vernon-Anacortes, Wash.

13. Ames, Iowa

14. Morgantown, W. Va.

15. Wausau, Wis.

16. Iowa City, Iowa

17. Winchester, Va.

18. Coeur d’Alene, Idaho

19. Glens Falls, N.Y.

20. Grand Forks, N.D.

Saturday, September 27, 2008

American Financial Crisis (4)

From Freakonomics


1) What has happened that is so remarkable?

This episode started when the Treasury nationalized Fannie Mae and Freddie Mac on September 8. Their combined assets are over $5 trillion. These firms help guarantee most of the mortgages in the United States. The Treasury only got authority from Congress to take this action in July, and in seeking the authority had insisted that no intervention would be needed.

The Treasury has replaced the management of both companies and will presumably oversee their operation. This decision marked an acknowledgment by the government that the mortgage market and the institutions to make it operate in the U.S. are broken.

On Monday, the largest bankruptcy filing in U.S. history was made by Lehman Brothers. Lehman had over $600 billion in assets and 25,000 employees. (The largest previous filing was WorldCom, whose assets just prior to bankruptcy were just over $100 billion.)

On Tuesday, the Federal Reserve made a bridge loan to A.I.G., the largest insurance company in the world; perhaps best known to most of the world as the shirt sponsor of Manchester United soccer club, A.I.G. has assets of over $1 trillion and over 100,000 employees worldwide. The Fed has the option to purchase up to 80 percent of the shares of A.I.G., is replacing A.I.G.’s management, and is nearly wiping out A.I.G.’s existing shareholders. A.I.G. is to be wound down by selling its assets over the next two years. (Don’t worry, Man U will be fine.) The Fed has never asserted its authority to intervene on this scale, in this form, or in a firm so far removed from its own supervisory authority.

2) Why did these things happen?

Friday, September 26, 2008

American Financial Crisis (3)

No More Creampuffs

The Government Is Willing to Let Wall Street Firms Fail. That's Good.

By Kenneth Rogoff (Tue. Sep. 16, 2008, Washington Post)

This past weekend, the U.S. Treasury and the Federal Reserve finally made it abundantly clear that they won't bail out every significant financial firm in America. Certainly this came as a rude shock to many financiers. In allowing the nation's fourth-largest investment bank, Lehman Brothers, to file for bankruptcy, and by forcefully indicating that they are prepared to see even more bankruptcies, our financial regulators showed Wall Street that they are not such creampuffs after all.

The question now: What's next? Assuming the financial sector continues to melt down over the next couple of months, at what point, if any, should the government get back into the game? It would be a mistake to do so before a great deal more consolidation takes place. During the epic boom of the past 20 years, the financial services sector became badly bloated. At its peak, it accounted for over one-third of corporate profits in the United States, not to mention the staggering billions of dollars in bonuses that Goldman Sachs ($12.1 billion in 2007) and others paid their employees. Now, in the wake of the subprime mortgage debacle, investment banks are seeing some of their most profitable lines of business evaporate. Profits from complex mortgage products are not coming back anytime soon; nor are profits in many other areas that rely on huge borrowing.

Instead, "deleveraging" is the buzzword throughout the financial system, as firms prune their borrowing and their positions. As profits come down to more earthly levels, the U.S. financial system is going to shrink. In all likelihood, at least 15 percent of financial employees -- including at the high end -- are going to lose their jobs. In principle, this shrinkage could take place through all firms and banks trimming their operations proportionately. But that is not how a capitalist economy operates. Whether it is the auto, airline or tech industries, the strong devour the weak. That is why it was inevitable that some banks would either fail or submit to distress mergers, including even some of the largest. That is why it has been quite clear for some months that the trauma to the U.S. financial system was not over.

Letting a big investment bank go, as the Fed and Treasury did this weekend, was a calculated risk in a difficult situation. And the risks are very real. With the immense interconnectivity of the financial system, there really is no telling where the unprecedented failure of a big investment bank might lead. On the other hand, ponying up tens of billions in tax money, as the Federal Reserve did in March when another investment bank, Bear Stearns, collapsed, is no answer, either. With the housing market still weakening, with U.S. exports likely to suffer as the global economy falters and with unemployment rising, it is clear that simply bailing out Lehman Brothers would not stop the rot in the financial system.

In March, the Federal Reserve took on $29 billion in risky Bear Stearns assets. Bailing out Lehman probably would have involved at least as large a commitment. If such a maneuver could have put an end to the crisis, it might have been justified, but that is hardly the case with many other giants teetering. This is not to mention the trillions of dollars in liabilities the Treasury took on 10 days ago in bailing out the mortgage giants Fannie Mae and Freddie Mac. These alone will probably end up costing taxpayers $100 billion to $200 billion, assuming inflation-adjusted housing prices fall another 10 to 12 percent.

Will taxpayers now escape without further damage? Probably not. More likely, the stress will continue for some time, radiating out into corporate debt, hitting big automakers, many debt-strapped cities and others. At some point, the federal government will blink again, and taxpayers will probably end up paying at least another couple hundred billion dollars before this extraordinary mess ends. But by placing some of the burden on the shareholders and bondholders of the big financial institutions, financial regulators have at least forced some discipline onto the system, making bankers and investors think twice before they once again head off to the races. By allowing firms that took excessive risks to fail, regulators also reduce the political pressure to overregulate the system in the aftermath of the crisis. Let's hope they hang tough for at least a little while longer.

Tuesday, September 23, 2008

Keynes's General Theory

The General Theory

Child Crime and the Solution

Recently the rate of juvenile delinquency* in Japan has been increasing. Many pundits have raised it as a hot issue. There may be a lot of reasons for the increase of juvenile delinquency in Japan: for example, the structural change of family including the breakdown of the traditional large family, the increase of divorce and fatherless/motherless family, the unemployment and overwork of the breadwinner and so on.

*juvenile delinquency
The regular committing of criminal acts by a young person.

However, what increases juvenile crime in Japan is not clear, so there have been a lot of conjectures about it in Japan. Personally, it is natural to think that it is closely related to the way to form family, because it is family or some alternative groups like an orphanage that brings up children.

What caught my eye as a way to solve the problem of juvenile crime is to punish rather the parents for their children’s wrongdoings. The juvenile crime rate was actually reported to decline remarkably after the law took effect, according to some research.

Therefore, we may think of it as one of the most effective solutions to decrease the juvenile crime.

However, it is not a new idea: there used to be such a traditional punishment on the parents in a village society in Japan: if their children had done something wrong, the parents would have been punished. Moreover, the punishment was not usually compulsory, but voluntary: the family refrained voluntarily from making public appearances.

It seems to be somewhat similar to the old Japanese way to take a responsibility for the wrongdoings, hara-kiri.

It can be thought to keep the community safe and to prevent their children from graduating from petty thievery to serious crime.

Interestingly, not everyone considers the punishment on parents a shining model.

According to the cons, children's parents cannot(or shouldn't) be punished unless they have done something wrong.

However, if they really wanted to prevent their children from committing a crime, the punishment on the parents would be one of the most effective policies to reduce juvenile crime. The tradition of such a collective responsibility as once existed in Japan as a way to keep the community orderly, though some people see it as totalitarianism, is thought to be a proof that it was actually effective to some extent.

Is the punishment on parents an effective way to avoid juvenile crime? If you think so, why?

Monday, September 22, 2008

Education in Japan

The popularity of private schools has been heated up recently in Japan.

One of the reasons has been thought to be that parents are disillusioned with the public mandatory education in Japan. Now it is a 9-year education system of elementary and junior high school. One of the biggest parents’ dissatisfaction with public schools is serious bullying at school: some naughty students bully other weaker students persistently after school and even during classes.

Thus, many bullied students of elementary and junior high schools feel very stressful mentally and, in the worst case, they kill themselves. Also, public schools have another serious problem: the classes are disturbed by some crazy students, and they are seriously difficult for teachers to fix.

Moreover, some of them do much violence to teachers and in result some of the teachers have been terribly distressed with them. So they cannot conduct their classes and thus the classes are more likely to be of lower quality. The mass media in Japan has called this situation “the collapse of classes” and should be solved as quickly as possible by some public policies.

For the above reason, many parents are eager to take their children to private schools that offer a better education to their children. Of course, private schools have also a problem of bullying and violence, but they generally try hard to solve it in order to keep their reputation high in the society. There the market mechanism is going well.

In contrast, public schools have no incentive to solve these serious problems. That’s why any effective policies must be needed to solve them!

On the other hand, parents try to educate their children better by themselves: home teaching is one of their solutions.

In Japan, parents seldom teach their children because they usually have jobs and no time to teach. (It costs a lot for parents to teach their children!) Alternatively, they hire a home teacher.
It’s kind of outsourcing.

I have been a home teacher for 6 years and have taught an elementary student whose purpose was to enter a private junior high school. There I could touch on parents’ feelings about the preparation for the entrance examination and I could understand the present situation of public schools.

From that experience, I began to think that home teacher is a realistically effective solution as a supplement to education at school and sometimes as an avoidance of some difficult problems at public schools, such as bullying and violence.

Needless to say, most of parents feel much more painful to hear that their children are bullied at school and have troubles in studying there. In this way, home teacher is a good way to help children study. However, to learn how to do with the social relationship with other people, schools might be an important way for children.

We have to face the fact that some parents can’t hire a home teacher for their budgetary reason. It’s another serious problem because their children are less likely to have a good education and thus to have a good future career.

It would be better for home teachers to be subsidized by the government, I guess, but it's not possible for the government to do so.

Sunday, September 21, 2008

Don't stop English

To be honest, studying English is boring to me. That’s why I am still a poor speaker of English and I should take the ESL class.

It’s not just me, but many Japanese students who have been feeling unsatisfied with learning English at school. That’s why native English speakers in Japan tend to avoid Japanese people in the street.

Nevertheless, there are many English schools in many towns in Japan and they are very popular, especially, among business people and housewives. It seems to show that many Japanese people want to master English, but at the same time somewhat weird, doesn’t it?

Many Japanese people have already studied English at school, but why do they want to study English at another school? Couldn't they enjoy English at school? I have been wondering why they couldn’t and what schools should do to make them enjoy it. This question is closely related to the public policies that improve the ability of most of Japanese people to use English that has been thought as an internationally lower level.

Actually, many English teachers in Japan have tried and studied hard to make them enjoy English, but at present it doesn’t look like they’ve succeeded.

One of the reasons is for us to study English at school in Japan. It’s just an ironical expression, but I think that it must be to the point.

Certainly few people like just memorizing English grammar, words and idioms. It must be a hard time and a little too boring. But what should it be better for us to do when studying English? The answer is quite easy: don’t study English!!

Reading through a book written in English that I like looks better for us to learn writing and reading English. Moreover, this is my teacher’s advice, to speak English it would be an effective and nice way for us to make English-speaking friends, because we can use English with a great passion.

Let me talk about my experience. Reading through my favorite textbook of economics was good for me. Even though it had more than 700 pages, its English was pretty easy to read and made me enjoy the time. That time I didn’t study English then, but had just studied an introductory economics.

By reading this English textbook, I could study how economics was explained in English by native English speaker.

It was very important because I felt kind of achievement. I reflected that it was important to feel really happy when we touched English. Of course, speaking English with a girl for whom I had felt affection would have been also a good way to learn English.

The key point for us to learn something is to have a great affection for it. It would be difficult for us to have it for studying English grammar, words and idioms. Therefore, we must first think about how to have such a feeling about studying English.

Studying is always boring. So I try to say to myself, "studying English is a bad way to learn English, but touching English as happily as possible should be needed most when studying English." Don't study English, but please don't stop it!

In this sense, it could be said that teachers who must teach students English must have a hard time conducting their English class.

(This post has been already checked by a native speaker of English, but I revised it a little.)

Saturday, September 20, 2008

American Financial Crisis (2)

The Post-Lehman World

We’re in a paradigm shift, its members say. The current financial turmoil marks the end of the era of wide-open global capitalism. Today’s gigantic government acquisitions signal a new political era, with more federal activism and tighter regulations.

This observation is then followed by a string of ethereal gottas and shoulds. We gotta have smart regulation that offers security but doesn’t stifle innovation. We gotta have rules that inhibit reckless gambling without squelching sensible risk-taking. We should limit excesses during booms and head off liquidations when things go bad.

In the first place, the idea that our problems stem from light regulation and could be solved by more regulation doesn’t fit all the facts. The current financial crisis is centered around highly regulated investment banks, while lightly regulated hedge funds are not doing so badly. Two of the biggest miscreants were Fannie Mae and Freddie Mac, which, in theory, “were probably the world’s most heavily supervised financial institutions,” according to Jonathan Kay of The Financial Times.

Moreover, there is a lot of lamentation about Clinton era reforms that loosened restrictions on banks. But it’s hard, as Megan McArdle of The Atlantic notes, to see what these reforms had to do with rising house prices, the flood of foreign investment that fed the credit bubble and the global creation of complex new financial instruments for pricing and distributing risk.

In other words, maybe there is something more going on here than just a bunch of laissez-faire regulators asleep at the wheel. But even if it is true that we need more federal activism, I’m a little curious about what we’re going to need to make the system work.

Surely, we’re going to need lawmakers who understand what caused the current meltdown and who can design rules to make sure it doesn’t happen again. And yet there’s no consensus about what caused this bubble.

Some people blame the Fed’s monetary policies, but some say the Fed had only a marginal effect. Some argue a flood of foreign investment allowed us to live beyond our means, while others say bad accounting regulations after Enron created a chain reaction of losses.

We don’t even have a clear explanation about the past, yet we’re also going to need regulators who understand the present and can diagnose the future.

We’re going to need regulators who can anticipate what the next Wall Street business model is going to look like, and how the next crisis will be different than the current one.

We’re apparently going to need an all-powerful Super-Fed than can manage inflation, unemployment, bubbles and maybe hurricanes — all at the same time! We’re going to need regulators who write regulations that control risky behavior rather than just channeling it off into dark corners, and who understand what’s happening in bank trading rooms even if the C.E.O.’s themselves are oblivious.

We’re also going to need regulators who can overcome politics and human nature. As McArdle notes, cracking down on subprime loans just when they were getting frothy would have meant issuing an edict that effectively said: “Don’t lend money to poor people.” Good luck with that.

We’d need regulators who could spot a bubble and squelch a boom just when things seem to be going good, who can scare away foreign investment and who could over-rule popularity-mongering presidents. (The statements by the two candidates this week have been moronic.)

To sum it all up, this supposed new era of federal activism is going to confront some old problems: the lack of information available to government planners, the inability to keep up with or control complex economic systems, the fact that political considerations invariably distort the best laid plans.

This doesn’t mean there’s nothing to be done. Martin Wolf suggests countercyclical capital requirements. Everybody seems to be for some updated version of the Resolution Trust Corporation, though disposing of complex debt securities has got to be more difficult than disposing of commercial real estate.

It’s just that there’s a big difference between dreaming of some ideal regulatory regime and actually putting one into practice. Everybody says we’re about to enter a new political era, rich in global financial regulation. The herd might just be wrong once again. ( DAVID BROOKS,September 18, 2008, NY Times )

Briefly speaking, what he means is that heavy regulations on financial market and institutions will not be the solution of this crisis, just will give birth to the new problem.

Teaching Market Efficiency

Prof. Otake talks about the merit of market competition (Japanese only). He raises an important issue on it by taking an example of antitrust policy in Japan:

Many who make an antitrust policy in Japan are rather jurists than economists and that is thought to be why the fundamental theorem of welfare economics(the merit of market competition) has not been well understood.

The policymakers don't understand the merit of market competition and thus can't have people understand the meaning of antitrust policy and deregulation in the market economy.

Therefore, it doesn't seem that Japanese people understand that the merit of market competition is greater than the demerit of widening gap of income.

How should we explain the merit of market competition, or market efficiency?

Some people say that the value of the process of market competition should be emphasized to teach it, others that we can have the incentive to do something valuable through the market competition.

Regarding it, prof. Mankiw has "the top three economic concepts" to teach introductory economics:

1. Comparative advantage and the gains from trade.

2. Supply, demand, and the efficiency of market equilibrium.

3. Market failure, such as externalities, and the role for government.

The lesson is that we can all gain from economic interdependence and that markets are a good, but not always perfect, way to coordinate people in an interdependent world.

It might be a little difficult for us to teach market efficiency. Some people teach it by using, what is called, an Edgeworth box and contract curve, but it seems too abstract to understand how efficient and well functioning the market economy is. In contrast, others teach it by using the principle of comparative advantage like Prof. Mankiw and I like it better.

I don't think that many econ students actually understand well the efficiency and the merit of market economy. It seems to me that they just pretend to talk about it like some economists whom they always see through the Bloomberg or Reuters TV.

Friday, September 19, 2008

American Financial Crisis (1)

WASHINGTON - Urgently moving on multiple fronts to stem the worst financial crisis in decades, the government on Friday said it would safeguard assets in money market mutual funds and temporarily banned short-selling of financial company stocks. The Treasury Department has asked Congress to give it sweeping power to buy up toxic debt that has unhinged Wall Street.

The Fed said it expanding its emergency lending efforts to allow commercial banks to finance purchases of asset-backed paper from money market funds. The central bank should help the funds to meet demands for redemptions.

The Securities and Exchange Commission early Friday imposed a temporary emergency ban on short-selling of financial company stocks, a trading method that bets the stocks will go down.

Wall Street headed for a huge rally Friday. The government's moves could help alleviate the uncertainty that has been sending the markets into tumult over the past week. Lending has grinded to a virtual standstill in the wake of the bankruptcy of Lehman Brothers Holdings Inc.

And European Central Bank, Swiss National Bank and Bank of England offered up more cash Friday. The three banks put a combined $90 billion into money markets in a lockstep move.

The chairman of the Senate Banking Committee, Chris Dodd, D-Conn., warned the United States could be "days away from a complete meltdown of our financial system" and said Congress is working quickly to prevent that.

Stocks on Wall Street shot up more than 400 points late Thursday on word that a plan was in the works. Fallout from the housing and credit debacles have badly bruised the economy and pushed unemployment to a five-year high.

"This staves off Judgment Day," said Anthony Sabino, professor of law and business at St. John's University. "This is a detox for banks, and will help cleanse themselves of the bad mortgage securities, loans and everything else that has hurt them."

The roots of the current crisis can be traced to lax lending for home mortgages — especially subprime loans given to borrowers with tarnished credit — during the housing boom. Lenders and borrowers were counting on home prices to keep zooming upward. But when the housing market went bust, home prices plummeted. Foreclosures spiked as people were left owing more on their mortgage than their home was worth. Rising mortgage rates also clobbered some homeowners.

As financial companies racked up multibillion-dollar losses on soured mortgage investments, and credit problems spread globally, firms hoarded cash and clamped down on lending. That crimped consumer and business spending, dragging down the national economy — a vicious cycle policymakers have been trying to break.

"The root cause of the stress in the capital markets is the real estate correction," Paulson said, adding he hopes to have a solution "aimed right at the heart of this problem."

Bernanke said a resolution would help "get our economy moving again."

Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, discounted the idea of setting up a new agency — similar to the Resolution Trust Corp. — established in 1989 to help resolve a savings and loan crisis at a cost to taxpayers of $125 billion.

"It will be the power — it may not be a new entity. It will be the power to buy up illiquid assets," Frank said. "There is this concern that if you had to wait to set up an entity, it could take too long."

The federal government already has pledged more than $600 billion in the past year to bail out, or help bail out, some of the biggest names in American finance. There was no immediate word on how much the new rescue plan might cost.

The SEC on Friday said it was acting in concert with the U.K. Financial Services Authority in taking emergency action to prohibit short selling in financial companies to protect the integrity of the securities market and boost investor confidence.

Associated Press writers Martin Crutsinger, Andrew Taylor and Marcy Gordon in Washington and Joe Bel Bruno in New York contributed to this report.


TOKYO (Reuters) - The world's oldest man celebrated his 113th birthday on Thursday, telling reporters at his home in southern Japan about his joyful life and healthy appetite.

Tanabe, recognized by the Guinness Book of World Records as the oldest living male last year, eats mostly vegetables and believes the key to longevity is not drinking alcohol.

..."He's said he wants to live for another 10 years, that he doesn't want to die." The Japanese are among the world's longest-lived people, with the number of those aged 100 or older at a record 36,276, a government report last week showed.

Japanese women have topped the world's longevity ranks for 23 years, while men rank third after Iceland and Hong Kong. (Reporting by Chisa Fujioka; editing by Sophie Hardach)

I have been said that I would live longer by a fortune teller. Why do many Japanese people live longer? I am wondering if these people are happy. That old man says he's happy. In terms of economics, it's an interesting topic what makes people live longer.

Sunday, September 07, 2008

Books,View and Mind

Trashy Books
I recognized that I had spent much time on reading trashy books when I lived in the United States, which tells me that it is really difficult to enjoy a good time in reading.

Looking back to my habit of reading, I had bought many books and sold them out after reading them, and bought books again and sold them again. It was just only an exercise of reading characters.

Many of my books, which are related to politics and economics, just allowed me to accumulate the knowledge of such topics but I don't think made me find out something new and great.

School and "Power of Human Being"
Recently it has been popular among the people in Japan to say that school is not useful to live a social life. In addition, they like adding the term "power" to some idioms, say, "power of explanation", "power of asking questions", "power of interpersonal skill" and "power of human being".

Adding the term "power" seems to be practical in our social life and to have a meaning of "force" or "influence" used for controlling and driving something and in my sight that's why many people like adding "power" to words.

To such public opinion, my habit of reading seems like clinging to my desk and not a solution to problems and thus a waste of money and time.

Good reading and Good books
However, at the same time, I might have learnt something important from such waste of money and time.

I had no money and couldn't spend much money on foods and clothing during my stay in the US, which made me find it important for me to spend much time on thinking of the present and myself and to doubt my point of view.

Good reading should be revising and doubting my point of view, rather than getting much knowledge in our modern life that spreads much information and knowledge among people.

I can say that in our modern information society the relative value of getting much knowledge has been decreasing, whereas that of considering how to read and understand it has been increasing.

It's not important to read many books. What and how to read and what to get from books is much more important. How books influenced our life and way of thinking should be talked to people.

In the same way, we always need good books if we want to have a good experience of reading.

Good books, I guess, are not written in pure and beautiful words. They should tell that a hopeful future is coming soon to us if we feel nervous about our present. They should tell that our life is so strange, surprising and interesting.

Good books shouldn't tell the answer to your question, but just a good hint to it. The hint should be a seed to change our viewpoint of world and maybe will influence us.

I feel that too many books actually copy old ideas and just pretend to give us new ones. When I feel so, I get afraid that it is as difficult for us to meet a good book as to meet a good partner in our life.

Burning books and Yearning for Power
It might be fate that school and book have been blamed for not practice.

It seems to me that many people have said that school is not useful in their life. It looks like successful business people and consultants teach at school and insist that their classes are very practical. Also, they look like they drive professors out of school who look as if they taught useless knowledge.

It's really ridiculous to say at school that school is not useful.

On the other hand, there are some students who are complaining that school doesn't teach useful things in a social life. If we could increase our income just by reading many books and writing reports, I would try to read and write as many books and reports as possible! It's also a ridiculous complaint.

However, I guess that it's a kind of proof that many people get nervous about their future and are frightened of their everyday life. It's because many people seem to expect that "power" can cope with people's such fear and threat in their life behind the popularity of adding "power" to many words.

This time I would like to keep in mind that "power"can be sometimes changed into kind of violence, whereas it is useful to control things for use. Violence is very easy to understand, but in contrast it is very hard and boring for us to read and think although it seems more important to me in our modern life.

Toward a Young and Fresh Mind
In our modern life, school and mind should give us a doubt on our way of view and an opportunity to revise it. Moreover, it should be a mirror of an image of our modern life.

I think that now is the time when we need something called "a young and fresh mind", which tries to doubt and revise our present view if necessary. Reading should be an act of seeking for such a young mind.

This column is the English version of it.