Politics

Does change in exchange rates affect international trade?

If yesterday one dollar bought 100 yen, and today one dollar buys 120 yen, each dollar today buys 20 percent more Japanese goods than it bought yesterday.

Source: Cafe Hayek: Hooray for a Strong Dollar

Really! So, presumably, this 20% more japanese products came out of nowhere in a day?

Or did he meant to say that purchasing power has shifted from holders of Japanese Yen to holders of US dollars. But how can we conclude that merely from the fact that exchange ratio between dollars and Yen has changed.

If say, Japanese govt. has printed more Yen. It will simply inflate the prices of all products in Yen. US dollars will also appreciate compared to Yen but (may) not appreciate compared to Japanese products.

So, why would US dollars be able to buy more Japanese products?

If amount of US dollars and Japanese products in the market haven't changed in a day, why would their ratio (prices) change?


"Guru"'s Businessman Hero

Those frustrated to see persistent bashing of business as evil in Bollywood (and Hollywood) movies will welcome the "Guru". I plan to see it as soon as the DVD version is released.

Who would ever have thought that one of the villains of a Bollywood film could be import duty? "Guru," the latest Bollywood blockbuster by the respected director Mani Ratnam, is that rare film -- perhaps Bollywood's first -- in which free markets are lauded as a force for good. Aliens emerging from the Taj Mahal would be less surprising.

"Guru" stars Abhishek Bachchan as Gurukant Desai, a character inspired by Dhirubhai Ambani. Ambani was that rare tycoon who went from rags to riches during the worst years of India's license raj, building Reliance Industries, which today is India's largest private-sector company. In the era in which Ambani flourished, the state strangled private enterprise with licenses, regulations and sundry restrictions. Jawaharlal Nehru's dictum that "Profit is a dirty word" about sums it up.

Source: Bollywood's New Capitalist Hero - WSJ.com


An just and efficent land acquisition

Nandigram village, near Haldia in West Bengal, is up in arms against forcible land acquisition for the Indonesian Salim group’s proposed project. In this case, I do support Arundhati Roy and others who are trying to support the rights of the villagers:

Left and left-of-centre intellectuals like Arundhati Roy, Romila Thapar, Jean Dreze, Sumit Sarkar and others in a joint statement said the tense situation in Nandigram is "likely to be repeated across the state if the policy continues to be executed as it has, without consideration for human rights, democratic procedures and livelihoods".

I wonder if what happened in Nandigram, Singur and Narmada will prompt this leftists to support property rights. Without property rights, only way against govertment violation of property rights is case-by-case agitation. With property rights, the courts will be on the side of those whose property rights are or will be affected.

In the end, we need to ensure that land acquisition is possible without force and without excessive transaction costs and veto by mischievous minorities. Swaminathan Aiyar's proposal for community-led land acquisition sounds pretty interesting!

As a libertarian, I instinctively dislike forced acquisition of the property of citizens by governments. So I support the farmer agitations in Singur and Nandigram against land acquisition by the West Bengal government for the Tata and Salim groups.

I do so with some reluctance, since I would love to see a re-industrialised West Bengal. But there are good and bad ways of achieving this. The wrong way is for state governments to acquire land by fiat. The right way is to empower farmers to become partners in industrialisation.

The Prime Minister has promised a new, humane displacement policy. This implies, rightly, that the old policy was inhumane. In the holy name of socialism, the government acquired land for any purpose it pleased, public or private, and decided what compensation to give. The abolition of the fundamental right to property in 1976 meant that compensation depended on the whim of politicians, not farmers' rights.

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However, a problem can arise when industry requires a block of contiguous land, and a few naysaying farmers exercise an effective veto even when the vast majority of farmers want to sell. The current answer is forced acquisition. Far better will be a new acquisition law that empowers farmers themselves to decide.

After all, if a few naysayers block a deal, they are affecting the property rights of farmers who want to sell. The new land law should provide for state governments or corporations to negotiate acquisition proposals with farmers, and then let the farmers vote on the deal. If a large majority--it could be two-thirds or three-quarters--vote in favour of selling, this should be binding on the minority.
In this scheme, the final decision will lie not with the state government or corporation, but with the community of farmers. It will constitute community-led acquisition. It will respect both the property rights and dignity of farmers, and make them full partners in industrialisation.

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The third feature of the new law should be to ensure that village residences stay untouched even when surrounding farmland is sold to corporations. A typical industrial estate consists of a core area that has to be walled off for security and tax reasons, and a non-core area with residences, community facilities and parks. The original villages should be incorporated into the non-core zones, which will then have a mixed population of villagers and sahibs, and not be enclaves of sahibs alone.


The U.S. government is a big insurance company, with a side business in national security: Paul Krugman

Found the above quote while browsing the Paul Krugman archive. Wow! It kinda puts the whole attitude of liberals towards the government and national security in the perspective! Isn't it?

Why do they want to dismantle it?

It's hard to understand why anyone would want to return us to the days before the New Deal, when millions of elderly people lived in poverty. But if you really dislike the notion that the government provides a safety net for the poor, then Social Security is the prime target. The U.S. government is a big insurance company, with a side business in national security. Social Security is the biggest social-insurance program that we have. It's been highly successful, and it's extremely popular. It's one of the things that makes people feel somewhat good about government -- and so, therefore, it must go.

The Fake Crisis: Economist Paul Krugman explains Bush's latest con -- Social Security


Pakistan's ISI helped Taliban: A Taliban Spokesman

Abdul Haq, better known as Dr. Hanif, was caught just hours after crossing the border from Pakistan into Afghanistan in Nangahar province.

...

Afghan investigators say that under questioning, Dr. Hanif, who had been working with the Taliban for the past 14 months, told them that the organization would never have been able to challenge Afghan military and NATO forces without the direct assistance of Pakistan's Inter-Services Intelligence agency. "This means that according to his confession, the ISI of Pakistan is directly involved in funding, arming and supporting the Taliban and other opposition groups against the government of Afghanistan," says NDS spokesman Sayed Ansari.

Although the ISI is believed to have played a major role in nurturing the Taliban and bringing it to power in the mid-1990s, Pakistan has routinely denied the accusation that it continues to provide support or a permissive environment for the organization. Just last week, outgoing U.S. National Intelligence Director John Negroponte warned that while Pakistan is "a frontline partner in the war on terror," it is also the country "where the Taliban and al-Qaeda maintain critical sanctuaries." Al-Qaeda, he said, is "cultivating stronger operational connections and relationships that radiate outward from their leaders' secure hideout in Pakistan to affiliates throughout the Middle East, North Africa and Europe."

And on a visit to Afghanistan Tuesday, Defense Secretary Robert Gates reiterated the point, saying, "There are more attacks coming across the border; there are al-Qaeda networks operating on the Pakistani side of the border. And these are issues that we clearly will have to pursue with the Pakistani government."

Source: A Taliban Spokesman's Confession -- Wednesday, Jan. 17, 2007 -- Page 1 -- TIME

It's not as if we need further proof of ISI's support of terrorists.

One this I did not understand, though! How is it a confession if a Taliban Spokesman says that al-Qaeda received the help from Pakistan's ISI?


Happiness by Command

Bhutan's Govt. claims to manage the lives of its people for greater happiness! Sounds more like prison to me!

Last year the BBC visited the landlocked Himalayan region, paying a visit to a country that only recently legalized the use of TV broadcasting and Internet service.[2]

Throughout the segment, viewers learn that residents of this country live in a Hollywood-esque feudal culture, but not by choice.[3] Rather, they are omnipotently regulated by an absolute monarch and many other pillars of Statism, such as legislators  who have seen fit to ban tobacco, some street advertising, and even plastic bags.[4]

All this in the name of preserving the traditional culture of short, brutish lives. Purportedly happy lives.

Not unlike their socialist neighbors, much of the legal economy in Bhutan is managed by 5-year plans.[5] Under the rallying cry of stemming the tide of "commercialism" brought on by — presumably — unhappy Western culture, stringent visa requirements prevent many foreigners from even visiting this bastion of happiness.[6]

Natives are legally required to wear Buddhist clothing known as gho and kira and strict regulations prevent many employment opportunities to those not of Bhutanese descent.[7] Thus, few outsiders get to experience this happy lifestyle first hand.[8]

Source: Happiness by Will or by Writ? - Mises Institute


John Kerry apologizes for a botched joke

Kerry Apologizes for 'A Botched Joke'

Sen. John Kerry apologized for "a botched joke" about President Bush's Iraq policies that led Bush and fellow Republicans to accuse him of insulting U.S. troops.
...
At issue is Kerry's speech to a group of California students on Monday, where he said people who don't study hard and do their homework would likely "get stuck in Iraq." Kerry said he mangled the delivery of a line aimed at Bush - according to aides, language which was originally written to say "you end up getting us stuck in a war in Iraq."

Belated and begruding apology! One question tough, the students who laughed at his joke couldn't have known it was a badly delivered joke. They believed the John Kerry's "joke" as it was delivered. Not sure, what reaction John Kerry had when he heard the laughter. He could have corrected himself and admonished the students for laughing at the expense of the soldiers.

Link: Pasadena Star-News - Dem stars rally on campus.

Kerry then told the students that if they were able to navigate the education system, they could get comfortable jobs - "If you don't, you get stuck in Iraq," he said to a mixture of laughter and gasps.


Don't try free-speech at home!

Via InstaPundit, Althouse: "Our avant-gardist artistic establishment... prefers to exercise its anti-bourgeois animus within the coddled purlieus of bourgeois security.".

Now that some Muslims have made it painfully obvious that religion-taunting is not an easy game anymore, abandoning it expresses fear, not respect for religion. And continuing to disrespect the religions that don't lash back only highlights that cowardice.

If Islamists can silence the art establishment, that prides itself on expressing shocking ideas and challenging powers-that-be, I can only imagine the fear that Muslims must be experiencing in countries that are controlled by Islamist dictatorial governments. If non-Muslims majorities living under the protection of powerful western law-and-order machinery cannot stand up to the Islamists, how can we expect Muslims in countries such as Iran, Pakistan, and some  Middle Eastern countries, to express their opinions freely? Every time we get cowed by the threats of Islamists violence and riots, message gets delivered to the oppressed living in those countries: don't try this at home!