Art&Blue-Liberalism

Brave New World is already here...!

2012-02-14T04:53:00.000-08:00

Brave New World is much utilitarian leaning totalitarian unlike 1984 the communist kinda totalitarian so the world shown by Brave New World (BNW) looks a little bit better than the counterpart shown in 1984. However, both worlds, BNW and 1984, are scary enough! Both worlds are the consequence derived from the indoctrination of pseudo-utopianism.

These novels are warning for people believing that utopia, the perfect community, can be established by Marxist kinda way, socialism, or welfare-state (The collective way to control the nature of distribution by a rational (what they say tho) principle).

Majority of those who are interested in politics and sociology seem to know 1984 so I'm not gonna explain about it. So, I'll explain about BNW. In BNW, we human-beings are no longer born naturally from mothers: Human-beings are dispatched from a capsule. New born babies and teenagers are "assessed" by the superior authorities as though they are the industrial productions. As far as I remember, it is called "Ford system" which is named from a car factory assemble line.

The better aspect of the world in BNW than the one in 1984 is that people are secured to enjoy much of their pleasure designed by their superior authority. The freedom of sex is very developed. There is a contraception method called "Malthusian drill" to avoid an "unplanned pregnancy". These "pleasures" provided in BNW are like an opiate for the mass. It may be a nice world as long as we are seen as "useful" and "productive" by the totalitarian superior authority. However, we will be thrown away like trash when we are found as failure when we are a baby or a kid, and liquidated when we are found as an error when we become an adult! Furthermore, we are no longer able to find parental love, true friendship, and adventure in our life when the world in BNW comes! Everything seems to be more perfectly designed materialistically in BNW than 1984. Nonetheless, the true happiness will be never derived from the world in BNW!

We seem to have avoided the world like 1984 due to the collapse of the USSR and the antipathy to China. However, the world shown in Brave New World seems to be pretty much possible to come! When we observe all the social problems happening in the European Welfare states, especially in Scandinavian nations, and Japan, the protective national administration has produced serious negative side effects such as fading family tie, increasing juvenile delinquencies, collapsing beautiful culture, declining motivation in adventure, and losing an individually unique reason of living!

I may not be there yet, but I am closer than I was yesterday.

2012-02-12T05:54:00.000-08:00

This picture is from http://absolutelymadness.tumblr.com/

Save the Page 3 of Sun, and exhabition of the natural beauty of fresh young girls!!

2012-02-08T05:31:00.000-08:00

First, watch the video on the following link:

Sun editor Dominic Mohan defends Page Three

Let's save our loving page 3! It is one of British cultures I really loved since I started living there!!!

Feminists, the Narrow minded intolerant servile ugly female cult, denounce the Page 3 and Sun as degrading women's image. However, this is a total falacy as the Sun editor Dominic Mohan insists! This is a beautiful artistic exhibition of the natural beauty of young girls. In addition, Sun, the news paper, also contributes to tackle with a lot of problems concerining Sex crimes, violence, and exploitation. Feminists' logic is very dogmatic and misguided by their stereotype.

Why shouldn't we celebrate the nature of fresh sensual beauty endowed to these young girls? Feminists always describe it as the exploitation by making them as a sexual object. Well, they are just jealous as evil cult members. Girls actually gain confidence by exhabiting their own endowed and polished beauty. These girls also have put a lot of effort to built their body and the technique of posing in front of camera. Modelling is a tough job. These ignorant feminists should have watched some documentary TV programmes or diaries written by these girls! We must admit this as a sort of fine art!

All in all, I would like to support saving the Page 3 of Sun and any other news papers which contain the resemblance of it. I also would like you to support for this issue with me enthusiastically for the sake of freedom of expression, openness of sensual expression, and defending the exhibition of these girls' natural beauty as our proudful culture!

D&D Alignment Chart for International Financial Economics

2012-02-04T08:12:00.000-08:00

* SFr(Swiss Franc): Lawful Good

This currency is internationally influential and still yet keeps the stability of its value. The information confidentiality of investors is very safely protected. Switzerland economic growth is robust. The value of this currency is always guaranteed because the strength of its value is always strong. The Swiss monetary policy is relatively conservative and stable and hardly takes a deviant action so that its value is predictable almost all the time. Thus, this currency is known to be the most trust able currency in this world (Lawful and Good).

* Gold: Neutral Good

The value of Gold never becomes zero because Gold itself has its own value as a commodity. Gold has been used as the most frequently used currency in the human history. The value of currencies used to be fixed with the convertibility to Gold. Nowadays, both Gold value and the value of all currencies moves flexibly. However, Gold is still considered as the safe asset to keep especially when the world financial situation is unpredictable and/or under a severe crisis. All in all, Gold is a neutral character, and always a good last resort for investors to secure their wealth.

* Euro: Chaotic Good

The newly introduced common currency in some European countries. Due to the compromised design of the fiscal structure in the Eurozone economy, this currency market is in a big chaos, and then also causes chaos in this global economy. Originally, this currency has a good aim, but its introduction induced to the chaotic consequence. The monetary policy by European Central Bank (ECB) is very rational and trustable, and realises the economy will not be stable unless the fiscal structure is reformed. The monetary policy still has a rational decision making power, and there is still a good expectation of this currency's future. Nonetheless, the attempt of introducing this currency under such a unique monetary system is very challenging, and it is still not sure whether this attempt becomes successful or simply fails.

Please read my essays about the European Union economy shown in the following link:
http://art-blue-liberalism.blogspot.com/search/label/European%20Union

* British Pound Sterling: Lawful Neutral

The value of this currency is always fluctuant so that not so good to trust its value but not bad to distrust. The monetary policy by Bank of England is relatively rational and proactive to the economic situation concerning the UK. Both the value of this currency and the monetary policy seem to always follow the natural law of this global financial market. The influence of the money supply of this currency is neither good nor bad.

* Japanese Yen: True Neutral

This currency is always a very neutral currency in terms of its action and characteristics. Japanese monetary policy is very passive to both Japanese and the world economic situation. There is no motivation of the monetary policy encouraged by any objectives. People still fairly trust this currency but not as much as the currencies in the Western world and the commodities.

* Russian Rouble: Chaotic Neutral

Although Russian economy has gained some credibility, her market situation is still unstable. This aspect caused her currency value is not so stable. It is still influential but does not have much unique characteristic yet.

* US dollar: Lawful Evil

The excess quantitative easing seems to stimulate neither US economy nor the world economy. This depreciates the value of this currency very sizably so that many investors feel very unsecured to keep this currency. However, the volume of this currency's money supply still has an enormous influence over this entire world economy. The monetary policy plays the game fair, and does not betray those who are royal to the USA and her economy. However, as soon as the US sees someone as an enemy of the USA and her economy, the punishment toward this enemy is very severe. In the history, this currency has acted as a leader of the world trade. However, the value is very fluctuating, and always suddenly changes not only its monetary policy but also the international policy such as termination of the Bretton Wood system. It still follows the international agreement on the international finance and trade, but it is known as a bully.

* Oil: Chaotic Neutral

Oil is a commodity which is frequently traded as a financial asset as well. In particular, since the derivative trade was introduced, Oil has been traded as a financial asset. Oil is an important natural resource for many economic activity so that the contingency of its value fluctuation is extremely big in the global financial market. Especially since the derivative trade started, the value of Oil has become very fluctuant so that the movement of its value severely affects people's life. In addition, the OPECs' political situation is very unstable, so the policy made by the OPECs often tends to be very bully for both the real market and the financial market in this world. It is neutral by means of characteristics because the value of Oil is dependent on not only by the OPECS, the suppliers, and the financial traders, but also the real market situation such as the demand for Oil and the technology of Oil usage. There are so many variables influencing the value of Oil.

* Renminbi: Chaotic Evil

The utterly selfish Chinese monetary policy caused the havoc in this global financial situation! Even though China joins WTO, it has never made any consensus with the organisation members. The artificial increase in the money supply to artificially reduces its value to increase the trade surplus in terms of the current account takes place, and then it induced a chaotic currency depreciation race among many countries. Although Chinese economy has grown to become the 2nd largest in the world, nobody does not rely on Renminbi as a reliable monetary asset. China should have realised that, although Chinese economy produces a trade surplus in their current account, they certainly make a significant loss in their capital account.

The Top 10 Millitary Leaders in World History

2012-01-21T07:04:00.000-08:00

10 Takeaki Enomoto Genius of diplomacy, language, and tactics. He attempted to establish the federal republic of Japan instead of Meiji restoration

9 Saladin He defeated many crusaders to save peaceful Islamic communities. He was famous for his mercifulness.

8 Friedrich Barbarossa Joined 3rd Crusader. Emperor, scientist ,and artist. He lead Tutonic empire to be unified and expanded.

7 Julius Caesar Charismatic Roman General. Known for ordering troops and the great usage of siege weapons.

6 Elwin Rommel The Desert Fox. His tactics brought German various victories in Africa. The best general ever in German History!

5 Genghis Khan Unified scattered normad trivals into one huge empire. Known for his great usage of mounted archer bands.

4 Oliver Cromwell Lord Protector of Great Britain. Founder of New Modelled Army. He brought meritocracy into British military.

3 Napoleon Bonaparte Established a great new law and order. Genius of artillery usage. His great usage of cannons lead France to invade Italy.

2 Zhuge Liang Kongming The genius Chinese from the state of Shu-Han. His knowledge was beyond humans' at the contemporary time period

1 Alexandros The Great No one can be more famous tactician than him! His tactics is still influential in this modern world military tactics

On Keynes and Hayek: Macroeconomics is Geographical rather than Political

2012-01-18T05:41:00.000-08:00

Both the traditional Kenyesian and Hayekian macroeconomic policies are no longer effective in this current world where the systemic risk in the global market is high. Unless it stimulates all countries' economy simultaneously, Keynesian stimulus package does not work. Unless there is an extremely universal consensus, Hayekian structural reform does not work. The universal government is less likely to be wanted so that both policies won't be accepted. Nowadays, the world economy seems to be turning back to focus on more Microeconomics like in the past. We are no longer able to expect the aggregate level to be either up or stabilised. Each economic agent now has to rely on his/her own risk management analysis, which is a microeconomic subject, in order to survive in this unpredictable macroeconomic environment.....

I admire Keynes himself because he accused Ricardo's theories for his misunderstanding of how the real world economy actually functions. Keynes was successful to offer the theories which are more correlated to the real world situation unlike Ricardo's ones. His critical analyses about the aspect that all classical economists ignored are very clear and sophisticated.

However, Keynes' fault is that he did not clearly mention "how exactly and effectively" pour their stimulus money into economy. This was the crucially weak characteristics of Keynesian theory.

I don't see Hayek as an economist; He is more likely a political economist / political philosopher.

I strongly argue that macroeconomics is more geographical rather than political i.e. passive than positive

Speaking of Monetary Economy, both Keynes and Hayek do not answer fully about how individual economic agents respond to the interest rate. The central bank's interest rate is (as long as it is operated rationally without any politicised ideological bias) merely determined to adjust the real interest rate to be zero as much as possible. If it is deviated from zero, it of course negatively affects macroeconomic environment. But, it does not mean the zero rate stimulate economy: The stimulus is very different from the central bank's interest rate.

Neither the animal spirit nor the long term expectation is fallacy. The right answer to describe the investment motive in the monetary economy is "There is nothing to specify a factor that stimulates in the macroeconomic level"! There is even a possibility that in a chaotic depression, the investment motive dramatically increases because of the possibility to win the gamble! Furthermore, in the economic boom, the interest rate tends to be "lowered" because the "risk of bankruptcy" of borrowers goes down.

This does not mean irrational; This is actually a very rational acts by economic agents because they act owing to their own surrounding environment, information obtained from their own sources, and psychological preference. Thus, Keynes' animal spirit fails. In addition, these economic agents do not too much care about the structural issues so much.

They decide their investment plan by means of the "form of contract" with their clients, rather than the structure of the borrowers' business. The contract differs across different types of borrowers. So, as long as the contract ensures to bring some business gain, investors are quite happy to lend money to mal-structured businesses. Thus, Hayek's focus on the long term structural issues fails.

On Augustine, Aquinas, and the transition from Roman Empire to the medieval, and to the pre-modern

2012-01-15T03:38:00.000-08:00

Unlike Aquinas, Augstine was very autocratic and dogmatic. Augstine believed that how human-beings, at the current (contemporary) time, are not how they ought to be. Therefore, they need a strict principle like the "idea" (This indicates Augstine was strongly influenced by Plato) to guide them to how they should be. The problem of his idea is that there is "no stop point" where all human-beings are fulfilled in what God, the idea, claim. That's why Augstine stated. Aquinas was more realistic and Augustine. Aquinas at least knew how human-beings are at the current (contemporary) is what God initially planned them to be. So, we can neither complain nor expect them to be at the ideal state. Aqunas argued that we coexist with our sins but we have to resist against it as much as possible. However, from my point of view, sin is a reality, and sin can be necessary. I do not see sin to be always something to be avoided; it is often a necessary to enjoy our life !!

Well, you have to imagine what the community was like in the early medieval age. Collapse of Roman Empire, havoc everywhere, and so people lost their direction in their life. Unlike nowadays when we can access to various information resource and be educated with Copernican world view, people at the medieval age were disparate to believe in something superstitious.... oh it should be said the superstitious worship was "necessary" to give people a certain principle as the "natural law", the universal invincible law. But, this explanation does not mean I support it: Actually I think of this divine rule was necessary evil at the contemporary time period. As a matter of fact, I reckon the late medieval age (about from the 3rd Crusader period) when people gradually became independent from this Christian autocracy. This was the sign that that part of the world became more stabilised, the technology advanced, and the information flow grew.

Furthermore, I highly admire all 3 Palestinian religions, Judaism, Christianity, and Islam. These religions enlightened people to think independent from the nature surrounding them. Neither all ancient religion nor all oriental religions have ever done in such a way! The Palestinian religions enabled individual human-beings to think rationally (beyond their surrounding nature and their box of thought), and established strongholds! Augstine and Aquinas definitely contributed in this great work!

US Political Compass (American Political Compass)

2012-01-12T06:21:00.001-08:00

Reference:

http://www.lts.com/~cprael/Meade_FAQ.htm

http://paulbrazeau.com/?p=484

We ♥ Mrs. Margaret Thatcher!

2012-01-07T11:24:00.000-08:00

Margaret Thatcher, my most respectable woman!
She "is" the "true queen of the UK"!!

The most respectable woman in politics in the world! I admire Mrs. Thatcher as a Messiah of Great Britain! She prevented Britain becoming a socialist country, and she brought a huge benefit to not only British citizens but all citizens of this world! Mrs. Thatcher is definitely the most respectable woman in this world especially for me...!

I thank Mrs. Margaret Thatcher so much that I am still not satisfied enough to show my gratitude to her........ How can I thank Mrs. Thatcher for what she has done for this world? I not only admire and love but also worship Mrs. Thatcher!

Although I am not a part of the 1%, the elite, I would love support capitalism! Under socialism, which all anti-Thatcherite believe in, not only the 1% but also the 99% lose their culture, wealth, and freedom of choice! The relative income is irrelevant to our well-being: The matter is the absolute income. The poorest of the rich nation is better off than the average of the poor nation. Mrs. Thatcher tried to establish the high aggregate GDP which brings the benefit to the poorest even though the gap between rich and poor became widened! I would like to teach the 99% this lesson! Then, they would be our support!

I admire these elites having described socialists nations and socialist mobs as the evil empire! If I have a choice to follow between the elites and the socialist mobs you describe, I would definitely choose the elite!

Furthermore, I really love the old USA which was originally the land of liberty and freedom! I know the current USA is different from she used to be. But, I have never blamed the US history for the current structural failure of her! Capitalism is a natural geometry, neither an ideology nor a political structure, as Mrs. Thatcher enlightened us!

* The following article is some discussion on certain topics concerning the previously written main article:

.... On Her Supporters:

Well, she was strong enough to make those with the dream of their old glory feel like the old glory might come back and the youths could understand what Mrs. Thatcher proposed to bring sounded even though these youths would not completely understand the theory be hid. I am really glad that the majority of people, even though some of those were not educated enough, have chosen Mrs. Thatcher and her popular capitalism...! Many wicked academics (That is one of the reasons why I decided to leave academia) and political activists tend to believe they are intelligent enough to think of the majority. They accuse capitalism due to their biased pseudo scientific ideology and their desire to control the majority by seducing them. But, I am really happy that majority were at least aware that these academics and political activists spoke non-sense! The majority is at least honest even though some of them are not intelligent enough meanwhile these socialist academics and political activists are dishonest (They start betraying the majority as soon as they gain the power as seen in the USSR!). This is why Marxism never prevails in this world!

.... On Media supported her:

I contradict what majority of political activists and socialist academics insist, which is mass-media information indoctrinates in capitalist countries: It indoctrinates in socialist countries! In capitalism, there are various media sources competing each other so that it is difficult, and people are entitled to choose their opinions. So, it is not media controlling their political decision, this is their upbringing, and their ability.

The media do not select their readers; The readers select the media! So, it is inevitable that there are different levels of media resources such as big news papers such as Wall Street Journal and Daily Telegraph and tabloid news papers such as Sun, Daily-Mail, and Daily Express. Even though I do not fancy reading these tabloid because I am an educated intelligent middle class gentleman (Although I loooove watching very nice looking chicks on their page 3 lol ), I accept these tabloid new papers exist in order to supply some news paper matching with some literacy level and fulfill the demand of some cheap new contents.

.... On education and political opinion:

I agree that youths sound not actively participate and express their political opinions unless they are really talented to until they become about 30 years old. Otherwise, these youths waste their precious time in over-sensational left wing Utopian dreams which are hardly relevant to the real world phenomena! Unless they are really talented to know what is "right", they should wait until they become mature enough to voluntary learn and express their own "right" political idea rationally. The "right" one is always relevant to our real world situation, and what is really needed for the mass.

..... On the movie of Mrs. Thatcher which was recently released:

I decided not to watch that movie because there would be any risk of mis-portraying my loving Mrs. Thatcher.....

My image of Mrs. Thatcher is divine!

So, portraying Mrs. Thatcher in such a technique for me is like painting a picture of Muhammad for Islamic people! I will keep my divine image of Mrs. Thatcher in my heart, and I create a big love romance movie between me and Mrs. Thatcher in my mind lol

Wish A Happy New Year in 2012 although this year will be dread full for the majority of people in this world...!

2011-12-31T18:53:00.000-08:00

The proverb for this year:

"Live like we die tomorrow; Talk like we live forver" (Mahatma Gandhi)

This year will be even tougher than the last year! Everyone has got to prepare for it!! The majority of people are in a bloody hell condition this year!!!

But, I still wish us A Happy New Year even though we may have got to prepare for this dreadful time period!

Lord of Mercy....... Amen!

The Irony of Fate: Russian New Year Tradition Movie

2011-12-25T07:06:00.000-08:00

This is the movie strongly recommended by my female friend from a Russian speaking country.

According to her, almost all Russian speaking people watch this movie in the night between the new year eve and the new year day. The reason why this movie is popular is that watching this movie before the new year comes makes people really happy, content, pleased, and entertained, and happily welcome the new year.

This movie is a love romance movie which contains Russian humours. Russian humours are quite unique. We see the humours from experiencing a little bit of pains in a funny incidence. Russian people seem to know how to laugh at unexpected incidences with some pains. We can see a strong pleasing humour from their natural ability to overcome any unexpected incidence and always expect a better outcome afterward by making fun of it instead of remaining the pain hurting them.

This also involves a secret rhetoric to criticise the extravagant USSR administration by using an example of their housing development plan. The great ability of Russian film makers is that they produced a love romance movie which does not look like harshly criticing the USSR administration. They simply made a fun of the negative influence of the administration in the Russian humours! The USSR government official would have never felt being criticised at all, and they would have simply enjoyed seeing the funny humour and unique charming personalities of the characters in this story!

This love romance is so diffrent from cheesy movies which always show provocative sex scenes in order to attract mobs to watch. This Russian movie is a traditional love romance which shows having experiencing dilemas and struggles to acquire a loving relationship with each other. Unlike the films shown nowadays, this Russian movie expresses the complicated feelings these young adults face, and how this complication developed their romantic mood. The story in this movie takes place in the contemporary time when majority of young adults still had a naive attitude toward loving relationship. This story may make young adults, and even teenagers, nowadays think these young adults in this story are too naive and jevenile. Nowadays, the romance these characters in this story experience seems to no longer exist so that some young generations may find difficult or even impossible to understand the meaning of the love of these characters in this story. However, I am happy to introduce these young generations to watch this movie as well.

This is educational to learn that openness of sexual relationship and having a big love romance are different from each other. At the contemporary period, people might not have been to flexible to express their emortion to each other unlike nowadays. These contemporary people have struggles in expressing their emortions and then suffer from dilema and regrets more than those nowadays. I do not mean the feeling and attitude toward love nowadays is faded. In fact, I embrace the flexibility and openness of expressing love, by means of physically and mentally, nowadays, and detest the reluctancy on expressing love in the old days. Nevertheless, the feeling of romance becomes bigger when the obstacle of expressing and/or obtaining love becomes bigger. Therefore, in this movie, we can discover the love romance which grows in the sorrow, the struggle, and the achievement after overcoming the reluctancy and the obstacle in the old day men&women relationship!!

Well, I hope everyone enjoys watching this video. This is a really good asset of people having lived in the communist Russia period! Click the following link to go to the website to watch "The Irony of Fate"!!

* Russian New Year Tradition Movie:
- The Irony Of Fate
http://video.kylekeeton.com/2008/12/russian-video-new-year-tradition-movie.html

* The image of this picture is from http://darim.info/59870-ironiya-sudby-ili-s-legkim-parom-saundtreki.html.

Superiority of Republicanism to Constitutional Monarchism (Re-posted)

2011-12-22T21:18:00.000-08:00

Replace the monarchy with our republic! Japanese monachist system should be abolished!! For meritocracy and progress!!! We should seriously start thinking of abolishing the monachy of Japan, Japanese Imperial Royal Family! All the offsprings of Hiroshito shall never prosper!!

I am a Japanese strongly craving to escape from my own country and accuse Japanese Royal Family of their demerit quality of the nation and mentality of Japanese born individuals.

Although it says that the state system can be sceptic about a radical autocratic system for Japan just because a Japanese monachism as Japan holds the costitutional monarchy, I completely bring forth a counterargument!

In fact, most of naitons having introduced, at least once, republicanism has experienced a radical autocratic regime in the past. I doubt the theory that an introduction of republicanism is related to inevitable provess to always experience a radical political dictatorship; though, in a way, I support to respect some of extreme anti-monarchist republicanist dectators such as Cromwell, the puritan in Britain, and Robespiere, the first leader of French Jacobin Party.

First of all, both USA and France have not experienced the long term domination of dictatorship having been an impregnable position such as Germany and South American Nations. Even Britain is a constitutional monarchy, because this country has just once experienced republic, it seems to successfully have encouraged individuals to bear a political responsibility in their own nation state! The reason why Japanese individuals are quite less likely to attempt to bear a political responsibility has been supposed to be Japanese monarchy!

I affirm the necessity to demolish Japanese monarchy at least once! As Japan introduces a presidencial system, as citizens choose their president as a Japanese representive charismatic authority all citizens will hold the same equality of opportunity to be elected as president as a superior charismatic figure, and then eventually all citizens will be in a strong and solid competition to crave for the power as a top of the sovereign. This meritocratic competition eventually encourages meritocracy to induce individuals in society to bear a political responsibility and deam of their progress in their life. The equal opportunity to become a top of sovereign state implies to induce citizens to strive to hold and adhere to the power, then it implies to the result meritocracy is stimulated and indivdiuals are more likely to demystify reality and social problems. Therefore, Japan may expect their superior and glorious progress!

On the other hand, going back to the story about USA and France, these nations have not established a long reigning dictatorship continuing to the modern period, and have privileged liberty.

Even immediately bofore the world war 2, the period all developed countries were under the crisis to establish a totalitarian government to reinforce their power of state to win wars, F D Roosevelt, one of my most respectable US president, has installed a pro-totalitarian system socalled "Soft-Socialism" which regards of a sort of totalitarian tendency though remain a democratic procedure and personal liberty. Therefore, USA could prevent the fear to introduce an exreme dictatorship such as German Natiz Regime, and successfully keep and establish a stable and health republic .

In France, at the time French Revolution was provoked, Jacobin Party conducted by Robespiere forced through the reign of terror and cracked down any potential rebelion against Jacobin Party's dogma. However, after their regime ended and the (*)Emperor Napoleon Bonapart (* the Emperor should imply to the authority refering to such as Roman emperor chosen through Meritocratic procedure, not inherited) successfully stabilised both economic and political system. Napoleon Bonapart his majesty then proposed the rationalised social orders and rules and contradicted the mystified ones having been maintained in Ancient-Regime. Under his regign of politics, citizens were highly encouraged to bear political responsibility and regarded highly of meritocracy which enables all citizens to dream to be a top of their sovereign state!

All in all, this "Rationality" implies that a healthy republicanism is sperior comparing to both an old and spoiling monarchy and a doctrinaire principle of state communist state.

.
* Japanese Senryuu today:

(Tennou (Jap. Monach.) is worthless more than anything)

(Missing and repressed People's Liberation we expect for)

(Offsprings of Hirohito shall never prosper)

(Unforgivable guilties _ The tragedy they bear on their solder)

* This post is the entry was originally posted on Sunday, September 09, 2007, and this post was re-posted edditted (A few sentenses were added on).

The Prisoners' Dilemma in the EU Parliament concerning the Fiscal Unification

2011-12-18T06:43:00.000-08:00

Last day, Ms. Merkel said "At least, this is the second best outcome" in the treaty concerning the EU fiscal unification. She wished if all EU nations had agreed to participate the fiscal unification plan as the best outcome. However, there are some nations, such as the U.K., who objected to the participation in the rescuing the European economy by the fiscal unification. Although there are substantial numbers of the EU countries agreed to participate in rescuing the European economy by their unified fiscal stimulus plan, the best outcome (all the EU nations participate) was not accomplished.

The matrix shown above is the Prisoners' Dilemma matrix modified to explain the Prisoners' Dilemma in the EU parliament concerning this treaty on the fiscal unification. At this time, this Prisoners' Dilemma matrix is based on the mixed strategy which considers all agents do not act like the prisoner in the Prisoners' Dilemma theory. In the pure strategy of the Prisoners' Dilemma theory, all agents decide to take their action 100% rationally, do not trust each other to cooperate together, and cannot exchange the information between them. By contrast, the mixed strategy takes the possibility of agents not acting 100% rationally, cooperating together, and exchanging information between agents. Therefore, we never know how these agents select their choice.

In this matrix, there are two groups of EU nations, Pro-Europeanists, such as Germany, France, and Benelux nations, and Euro-Sceptics, such as the U.K., Sweden, and Czech. This model generalised to suppose all EU nations belong to either groups, and both groups' decision has a 50% influence over European economy.

The bottom left cells of this matrix are deleted because it is less likely that the Euro-Sceptics sign the treaty whereas the Pro-Europeanists do not.

If this game is based on the pure strategy, the Eurosceptic group would definitely not sign the treaty. The benefit to the Euro-Sceptic group will gain the tremendously high benefit by not signing the treaty when the Pro-Europeanist group sign the treaty. Furthermore, in the pure strategy, the Pro-Europeanist group would have given up signing the treaty as follow:

Because, in the pure strategy, both groups are afraid of the situation that the other group gains the free riding benefit by not signing the treary. The pure strategy does not take account of any action motivated by an intuition, a superstitious belief, altruism, an expectation that the opponent may cooperate, and an anticipation without logics. All groups select their choice completely based on the benefit coming from the rational and logical but selfish interest if it were the pure strategy. Therefore, in the pure strategy, both groups take the possibility that the Pro-Europeanists would not sign the treaty while the Euro-Sceptics would sign the treary (This is a very odd case which would not happen in the real world) into their consideration. So, that is why the Ms. Merkel's wanting outcomes are the least likely in the pure strategy. This is the reason why it would be the case, even in the real world situation, that both would not sign up the treaty even though both groups could maximise the utility if both sign up the treaty if it were based on the pure strategy.

By contrast, the last resolution on the treaty was based on the mixed strategy. Even some Euro-Sceptic leaning nations took account of the possible benefit for themselves coming from signing the treaty by knowing almost 100% of the Pro-Europeanist leaning nations would sign the treaty. In the real world, especially in such a big scale rather than two prisoners in a separated shuttered cell, there are always cheap talks, a flexible flow of information exchange, and irrationality caused by human-emotion and belief in something superstitious, and/or anticipated outcomes rather than the outcomes derived from logical analyses. Thus, everyone knew that all the Pro-European leaning nations were more likely to sign the treaty, and the Euro-Sceptics leaning nations would not make the loss by any choice they could select. This is why Ms. Merkel really wanted all the EU nations signed the treaty.

The matrix of the outcomes in the mixed strategy is as follows:

The outcome of the last resolution could avoid the worst case scenario, in which all the Euro-Sceptic leaning nations did not signed the treaty, and either 100% or 25% of the Pro-European leaning nations signed the treaty. If the worst case scenario took place, all the nations who signed the treaty had to suffer, and the rest of the nations who did not sign the treaty could gain the free-riding benefit. This is what Ms. Merkel was afraid of, and Mr. Cameron would have induced if not only the U.K. but also substantial numbers of nations did not sign the treaty.

The outcome was the second best according to what Ms. Merkel said. Majority of the EU member nations (more than 50%) agreed with the treaty so that the outcome became the middle right cell. Although it could not be in the bottom right cell, it did cause neither the decline of the power of the EU economy (The center cell) nor the collapse of the Eurozone (The top left cell: The collapse would be 100% possible in the pure strategy), nor the free riding by the Eurosceptic leaning nations (The top middle cell and the top right cell).

Nonetheless, it was almost falling into the worst case scenario (either the free riding by the Euro-Sceptic leaning nations or the collapse of the European Integration) unless the Pro-Europeanists had given up signing the treaty by knowing all the other nations would not sign the treaty. This is why Mr. Cameron's reaction caused to significantly lose the trust in the U.K. from the EU. At least, Mr. Cameron should have acted not explicitly like what he has done. He should have been wise enough not let any one to know the U.K. has wanted to keep the distance from the fiscal unification. The way Mr. Cameron acted was to make the Pro-Europeanist nations to think the U.K. is quite happy to sacrifice the EU for her own sake. I did not disagree with the Euro-Scepticism at all. But, I just wanted him to know this Game Theory! All political leaders, diplomats, and any those who have to face a big complicated decision making have got to study this Game Theory!!

The CBA of the EU fiscal unification and Mr. Cameron's failure in the Game Theory

2011-12-17T08:03:00.000-08:00

.... Where does "Europe" go....?

---------------------------------------------

1. The CBA of the EU fiscal unification

The Eurozone countries are no longer able to give up the monetary union.

Even though the cost of continuing the monetary union is high, the loss of benefit when they dissolve the monetary union is very high.

As one of this blog entries [Sunday, September 04, 2011: Empirical evidence prooving Liquidity-trap: Lower interest rate does not stimulate economy ] demonstrated, all Eurozone member countries, except for Ireland, share a strongly harmonised business cycle. The dependency of these Eurozone countries (excluding Ireland) on the inter member state is extremely high.

Furthermore, when these countries abolish using the Euro, the value of their national debt will be almost worthless. Majority of Eurozone nations, especially the Mediterranean ones and the newly entered Eastern European countries, were benenefitted from their national debt value based on the value of Euro. These national debt is valued not only on the credit of these countries itself but also the credit rate of the entire Eurozone economy. Therefore, leaving or dissolving the Eurozone will decrease the value of their national debt, so these countries will suffer in their public finance. This means that these countries eventually have to go back to the old system relying on the excess money supply which induces a high inflation in their countries. (* Read "2. The problem caused by the monetary policy transformation" in [Saturday, July 23, 2011: The European Monetary Union is inevitable, but has to be fundamentally revised ])

Even Germany will be indifferent between restoring German national currency and keeping the Euro. German GDP relies on the export and German industries expanding their business in the EU member states with a low cost of labour, corporation tax, land, and utilities. In addition, German tourists visiting European (Tourism is an import from foreign countries to home countries: The monetary transaction of Germans touring foreign countries is German import from abroad). Therefore, the cost of German economy of leaving/relinquishing Euro is equally significantly high as same as keeping and assisting the European Monetary Union (EMU) by German effort. Germany may do well even she leaves/dissolves the EMU. But, the loss of the benefit Germany is gaining from the EMU is certain, and the cost of leaving/relinqushing Euro is uncertain.

All in all, even though the cost of keeping the EMU is high, the balance of the both cost and benefit all these Eurozone countries have is certain. The benefit will be certainly lowered by dissolving the EMU for both Germany and the rest of the member nations. Thus, the certainty of keeping and improving the EMU is certain at least, therefore the optimum solution for the European economy despite the high cost of reforming and maintaining the EMU.

------------------------------------------

2. Mr. Cameron's failure in the Game Theory

On the other hand, the UK and Ireland will suffer from participating thsi scheme due to their independent (dis-harmonised) business cycle with the continental Europe. However, I would like to blame Mr. Cameron's unwise way to excuse to avoid participating with the European fiscal integration. The diplomacy is a serious mind game. As I have studied the "Game theory", I understand the importance of reading the mind of opponents, and not being too honest.

The picture below is the prisoners' dilema:

This considers both prisoners do not trust each other fully and there is no communication taken place between them.

Even though both can gain the best outcome (if they still think of each other as friend) by cooperating together by insisting both of them are not guilty, they are more likely to incooperate with each other. The most likely outcome will be that both prisoners will be guilty. This is because you can obtain the better outcome only for "yourself" by betraying your partner. You also may think that your partner is also about to betray you to gain the better outcome than helping you. Therefore, both you confess your partner is guilty and your partner confesses you are guilty.

However, if both of prisoners trusted each other and cooperated together to support each other, then both of them would not confess their partner is guilty.

Ms. Markel's feeling must feel like Henry (the guy in this picture) betrayed by Dave (Wow, same name as Mr. Cameron's first name accidently lol). In the conference, Ms. Merkel said that the best outcome would be that all the EU nations including both the Eurozone and the non-Eurozone cooperate together. However, it fell into the "second" best outcome in which not all but many EU nations agree to participate. From now, not only Germany but also the other EU nations start regarding the UK as an incooperating member in the Game Theory. All cooperating EU nations will act like the prisoners trusting in the previously shown matrix. By contrast, between the UK and the Europe will be the prisoners not trusting each other in the matrix.

When one player, whose chose has a high influence, chooses an incooperative answer, it will be a threat on the opponents. Now, the EU has started to see the UK to be an incooperative opponent (The free rider) so that the EU's treatment on the UK will become harsh from now.

If Mr. Cameron wanted to keep a distance from this treaty on the fiscal unification, he should have pretended he would still cooperate with them but inducing the consequence for the UK not to sacrifice her national interest a lot..... The U.K. obviously wants to avoid being too much involved in the fiscal unification. It burdens a cost on the UK because the UK is a relatively richer country so the EU expects Britain to participate or even sacrifice herself to help the EU. However, it is an extremely tough task for the U.K. to declare keeping distance from the EU fiscal unification plan. The U.K. has signed up the trade agreement with the EU since the U.K. joined the EU so that the U.K. has a responsibility for the entire European economy. Therefore, the U.K. has to be very wise to keep the distance by preventing the situation that the EU realises the U.K. is incooperative. I do not have any particular advice for Mr. Cameron. But he should have not been too honest to show the U.K. keeps an incooperative attitude on the current EU fiscal unification. We should have learned from what Machiavelli taught in his book "Prince" to act wisely in a foreign diplomatic game...!

Discussion on European Integration

2011-12-10T22:22:00.000-08:00

The European integration has failed* due to the compromise of economic rationale (Maastrict treaty on economic policies), and Kantasian = deontologist passion blinding both Europhiles from the currently shown reality which we can immediately observe....!

* Okey, I meant the "current administration" of European integration failed so that it requires the "new" administration. They still postpone the final weapon to tackle with the Euro crisis, which is the fiscal integration by establishing a common fiscal policy ordered by the EU federal government. But, they certainly "must revise Maastrict treaty " (I bold this word), fundamentally restructure of both labour market (by reducing barriers to enter any national labour market) and capital market (unifying the financial market regulation) to make them more flexible, and reduce the power of national governments (e.g. abolishing the right of incurring national debts, and irrational ego unstabilising the integration process).

But, they still postpone the final weapon to tackle with the Euro crisis, which is the fiscal integration by establishing a common fiscal policy ordered by the EU federal government. I don't think they are going to give up their economic integration so easily. I can see a sort of Kantasian = deontologist passion: They don't see the fact = reality they can obviously see: They merely focus on the anticipated outcome based on their fundamental principle rather than the reality they can see at the immediate moment. Therefore, for both Europhiles, the cost burdened on the European integration doesn't matter for them to quit striving to acquire their anticipated outcome.....

Judging from my point of view which is based on the "reality", "sum of utility", "freedom of choice (individual liberty)", and "economic rationale", the European integration has failed due to the compromise of economic rationale (Maastrict treaty on economic policies), and over-idealised analyses and expectations of European integration based on their fundamental deontologism which blinds them from the currently shown reality which we can immediately observe....!

I am not an enthusiastic supporter of the European Federalism: I would support only if they want to keep the common monetary policy. Actually, compared to North America and Asia, European population mobility rate is still low, which is a disadvantage of not having a strong federal gov't intervention into the business cycle of each member country. However, Europe has more frequent trade tie (GDP share of inter-country/state trade) between the member countries (states) than the USA. This fact lead the European monetary integration inevitable. The US monetary integration works better than European because they naturally had a common interest to make one strong unified nation without the conflict of interests like what we see in Europe. Even though the US citizens are very diverse (sharing each own different identity), they naturally have a very strong fundamental principle as a US citizen which works as "a priori" of their identity as the US citizen. Even though the US citizens are proud of their diversity and keep their own background identity from the motherland where they or their ancestors are from, almost all of them share their pride as the "US citizen". There is one remarkable political leader, who came into the power in a half century ago, said that the stable process of European integration requires one super-national federal authority which conducts them structurally and provides the "a priori" of their identity. His analysis was, and still is, underestimated, but the current situation proves his analysis was not false.

I agree with you having said that there is a risk of the federalism encouraging some member countries to become like Detroid and some minority states in the USA. The current US fiscal and monetary structure is based on Hamiltonian political model. Hamiltonianism advocates in the meritocratic/technocratic bureaucratic centralised structure which puts priority on socioeconomic stability. Thus, this Hamiltonian system merely focuses on the interest of the USA as a whole so that sacrifices the minority states' interest for the US federal interest. This induced that change in the industrial structure caused the highly volatile business cycle of some cities like Detroid. This is one aspect reminding why there are still substantially many people advocating "The South Rise Again". I am not particularly fond of Hamiltonianism at all. However, I noticed that Hamiltonian was once required when the USA needed to be unified when her people's interest became same to protect themselves under one umbrella of the federal principle guideline. Actually, at the time when the USA shifted to the more centralised federalism at the contemporary period, many uninfluential states were willing to support the federalism and be under the influence of the federal interaction due to the benefit from joining the unified social and economic tie with the other states and the federal authority, and the security required to protect from foreign nations. Nonetheless, nowadays, the USA should be more decentralised and many states started to want to be more detached from the federal intervention. This is that the different needs in different time, place, and occasion. Actually, the Mediterranean countries and Eastern European countries were "willing to" join the European political and economic integration more than Germany wanted them. These nations have already had a strong co-integrated business cycle with the main player of European economy so that it was inevitable they required the common currency to smooth the trade between these nations. The Mediterranean countries' GDP is very reliant on the key players in European economy (Germany, France, and Benelux countries). Italian economic and financial centre, Lombardia, is related to the West and Central Europe with a same or higher degree of the tie with the rest of Italy. Spain and Greece depend on exporting their tourism to these key European economic players. Eastern European nations still suffer from the asset of the USSR administration so that they are clinging to the father ship kinda protection from the EU to wipe out the suffrage from the USSR influence. These factors seem to be a resemblance of the USA transit to Hamiltonian nation state. If the centralisation like the US Hamiltonianism is required and answers to the great sum of utility, it should be adapted to temporary. I don't hope the strong federal reform continues in too long term. But, it looks like a temporary centralisation seems to be required as an emergent surgery for Europe....

Global Wealth Tax is Inevitable to Sustain Capitalism

2011-12-04T07:34:00.000-08:00

* This is a comment on an article from Financial Times (Click this highlighted link):
Global wealth tax

This is a new policy which should be "inevitably" introduced to this globalised economy. As the economic activities of individual economic agents have become so globalised that richer individuals transact their income and wealth across national borders frequently. Therefore, taxing rich has become more complicated and the income tax organised by one nation is not able to tax on richs' income efficiently. If individuals have freedom to move their wealth across the border, the nationally based tax system is not longer able to tax on their income efficiently and even fairly.

Furthermore, managements of the public goods (natural resources, environment, and very externally contingent industries such as nuclear technology and air traffic) have become globalied as well. It seems to be more necessary to manage these public goods usage and distribution in a globalised scale than national scale than the past as the economic activities are globalised more than the past. Therefore, there needs a public fonding resource based on a global scale i.e. Tax by a global institution to spend for global public goods.

Some monetalist zealots may claim that this is a socialist system which disturbs an equity of rich individuals. Nonetheless, if they blame this introduction of the new policy as a socialist idea, we also should abolish the progressive income tax based on national and regional scale. If they supported the complete abolition of tax system, government, public sectors, corporations, and nation states, I would agree with them. However, as long as they still stick to keeping these institutions in our community, the claim against the global wealth tax is not convincing.

I believe the progressive income tax is a necessary evil. As the world now still requires us to tax system, government, public sectors, corporations, and nation states to maintain a healthy usage of public goods, we inevitably need the progressive tax at the "minimum but optimum" level in order to be able to manage the public goods well. The income tax is the unfair tax, but the most efficient tax to take it by means of marginal propensity of saving. It is a macro economic issue. The richer individuals tend to split their disposable income into saving which does not goes into the economic stimulus. By contrast, the poorer tend not to be able to split their disposable income into saving. So, the higher income tax on richer is less likely to reduce their income expenditure into economy and reduce their utility by taxing on their income. So they are more likely to maximise their utility at the given disposable income level after the newly increased income tax. On the other hand, the higher income tax on poor reduces their income expenditure into economy and reduce their utility because their disposable income is reduced from the level maximing their utility.

As a matter of fact, the introduction of the Global Wealth Tax may reduce the bureaucracy rather than keeing the income tax collection based on national and regional level. It would be easier to tax some rich individuals transacting their wealth across the national borders than national governments cover the cost of scrutnise how these rich individual keep their wealth. This new tax also keeps the cost for rich individuals to move across countries by means of the different tax systems and the credit rating in each different countries. It will be possible if the introduction of the Global Income Tax system enables them to exempt from national income tax and maybe regional income tax as well. The middle and the lower income individuals will be taxed nationally and regionally, but the high income individuals should be taxed globally and exempted from paying national and regional income tax, or exempted just from national income tax and still paying regional income tax. The global economic institution should then distribute the Global Wealth Tax revenue to both the expenditure for global public goods and the government expenditure for national government and regional local authorities.

J.M. Keynes was actually the savor of capitalism because he said that, as capitalism grows, the wider scale of intervention becomes inevitable like establishing the IMF in 1944, and establishing the EMU in 1990s and 2000s (and possibly the European federal government). This is a next step of what J.M. Keynes described about an evolution of the global economy. I definitely think this global tax on rish is rather a capitalist idea. The reason why is that in order to make a process more efficient, fair, and effective, the progressive tax system has to be revised and evolved in order to sustain capitalism.

If we support capitalism going on, we inevitably need to support introduction of some globalised public economic system. Otherwise, the negligence of introducing a new global based policy causes instability of economies in this globe, causes economic catorophe, and then rising socialism. In order to stop socialism rising, we must adapt the inevitable global public policy and the institution controlling over it. Capitalism is only one most liberal alternative economic system which distributes the highest sum of utility as much as possible. Socialism and Cultural-Conservativism, the counter-part of Capitalism = Liberalism, are the opposite: retarding, supressing the sum of utility, and idealised system ignoring the natural geometry of market mechanism which inevitably exists in our living world. Hence, the monetalists' and bandit libertarians' objection against the new global capitalist order may help socialism and cultural-conservativism coming into the power. Capitalism inevitably evolves, and we must adapt into the new order following this evolution process as Prof. J.M. Keynes taught us...!

Fed's Monetalism will fail: It cannot save the world economy

2011-12-01T05:40:00.001-08:00

.... This is "Nothing but a drop in the bucket"! I really detest the fact that there is still a fundamentalist intiutive ideology of monetalist theory dominating this world economy....! We've got to learn what J.M. Keynes mentioned about the "liquidty-trap"!

Speaking of European mal-functioning economy, the fundamental reason why Euro failed was the compromised role of fiscal policy and financial market regulation. Therefore, the further liquidity into the current European economy will not be effective enough, and only leaves negative changes more than positive changes.

* I recommend to watch this Wall Street Journal article first before reading this entry further (Click this highlighted link):
Close Ties Facilitated Coordinated Moves

I am sure that these money injected without any fundamental reconstruction of the fiscal structure will just flow into the "saving" rather than averting a further recession or even a depression!

Futhermore, this injection of US$ will definitely cause the further depreciation of the long run US bonds!

The hypowered money theory offered by the monetalist theory does not work because the velocity of money flow is already very low! Extra supply of the hypowered money does not induce a high velocity of money; it is an opposite! The hypowered money only works in the situation that the velocity is already high! The velocity of money is exogenous; not endogenous like what the monetalists say!

As I am now reading a wonderful book written by Prof. Stiglitz about the paradigm of monetary transactions, I know the monetary policy by central banks' role is too weak to influence/control over the monetary transactions in the market. The interest rate, reserve requirement, and money supply are less likely to direct the flow of the monetary transactions. The monetarist theory completely ignores the different characteristics of individuals and financial institutions; they only assume all of us are risk neutral, there is no risk of bankruptcy taken for account, and influences from the information about credit rating!

Monetarists believe that the interest rate and the volume of lending activities are determined merely by the supply of money available. However, in the real world, private banks and financial instutitions are more likely to set their interest rate and control their volume of lending activities by means of the risk premium of borrowers (consisitency and volatility of change in their profit rate, risk of bankruptcy, risk of assymetric information about borrowers, credit rating of borrowers, etc). This fact infers that the traditional macroeconomic policy via the monetary policy seldomly works to control the macroeconomic environment. The characteristics of each individual economic agent is the key issue to analyse the money lending activity.

Majority of these lenders, assisted by the central banks, have already become risk averse so that they are less likely to increase the volume of their lending activity. But, even though, they keep themselves as either risk neutral (acting as what Monetarists assume) or risk lover (becoming more active to invest in a tough economic climate), and then they lend high volume of funds, the risk of bankruptcy still remains same unless the structural change in the real market takes place. They may probaly invest more funds even though these targets of their investment become riskier. However, they will either charge the high interest to cover the unseen risk of these borrowers or charge a moderate interest rate and burdern a high risk of the bankruptcy of themselves. Either case scenario is tough because it is either increasing the cost for borrowers (and eventually induces borrower's bankruptcy, and then loss or even bankruptcy of lenders) or increasing the risk of bankruptcy of both lenders and borrowers. The market becomes more voluatile when the economic sitations becomes worse, the balance sheet of both lenders and borrowers becomes very inconsistent i.e. their profit/loss is unpredictable. In this case, even though the volume of money transaction is stimulated by the central banks' monetary policy, it will end up with the high interest rate (for the security of lenders) or gambling of lenders (welcoming risk of investing with a moderate interest rate to risker borrowers).

All in all, even though the central banks' action offers the sizably low interest rate and/or the high volume of quantitative easining, private banks and any other financial institutions may increase their own interest rate due to the high risk of bankruptcy involved in this investment under this current economic climate. Borrowers still suffer from unchanged or even increased interest rate. The exective members of banks and financial institutions gain benefit from securing the existence of their work place due to the central banks' assistance to their corporate finance by the quantitative easing. Those who can spread their aggregate income to their saving will be benefited, but this kind of individuals tend to be minority under such a tough economic climate. Thus, this action is irrelevant to encouraging the high volume of money lending.

* If you would like to know why and how the structural change of EU economy is emerged, please read "Friday, June 03, 2011
Europe in crisis...! (Click here to read!)"

I often wonder why these big guys in these superior positions have never learnt from history although they are supposed to be educated? When we learn from the history, only relying on the monetary policy channel does not work under the deflationary pressue i.e. the recession period = socio-economic stagnation. The perpetuation of it always caused rise in the oppressive political groups such as Natiz and Japanese National Shintoists.

Only the remarkable legendary economist claimed the danger of deflation is J.M. Keynes. Unfortunately, majority of economists in the history tend to underestimate the impacts of deflation. It is because the deflation is a unique phenomenon which can be only seen in the nations and the globe whose capitalism is developed and spread out. So, many classical economists had not seen deflation during they were alive. The first experience of the recession (and then deflation) simultaneously taking place in the entire globe could be the depression from 1920s to 1930s. J.M. Keynes was the first and probably the last economist who warned the danger of deflation.... When we forget about what Prof. Keynes warned, this world will inevitably be drawn into the "depression"...!

Regarding the UN trial to the former Khmer Rouge members

2011-11-22T06:44:00.000-08:00

.. Unforgettable disgraceful memories of the Communist Cambodia. This was a dreadful tragedy created by one political sect obsessed with a psychotic ideology.

* Watch this BBC video clip (Click the link to pop up the video on the another screen) first:
Cambodia seeks Khmer Rouge justice
www.bbc.co.uk

The founders of Khumer Rouge, the communist psychotic dictatorial party was raised up by French Communist party. Although French Communist party may not be directly responsible for the political actions taken by Khmer Rouge, French Communist party has certainly influenced these Cambodian political psycho ultra left wing political revolutionaries. Not only French Communists but also those who have ever been attracted to the USSR style state socialism and those different form of believers of idealistic socialism are somehow responsible for this tragedy. This is a lesson to teach that any form of political administrations which ignores the geometry of the natural market mechanism, and those who believe their theory leads to establish an ideal community by theory will fail to the same mistake as what Khmer Rouge has done...! Even though you (those who believe in your own socialist belief) may think your socialism does not result in the same consequence as what Khmer Rouge has done, your socialism "will" turn up to be a resemblance of what Khmer Rouge has done "inevitably"!

The court said "Rather than the command of your superior authority, you should have listen to the internal human passion". This shows the UN court is based on a type of Customary Law which follows Kantian deontrogism. Although I agree with sentence this former members of Khmer Rouge with any form of negative sanctions, I always disagree with the UN court ethics because I do not trust the Customary Law based on Deontrogy.

My believing law theory, Equity Law, would have stated "You have to be punished at the level which is equitable to the pain of individuals having suffered from disutility provided, any financial loss incurred, and any negative contingent external factors created by your action".

The moment to know soul and spiril certainly exist in humans...

2011-11-21T04:52:00.000-08:00

Today, I found and realised that something like soul and spirit exist certainly in this terrestrial world .... It's found in an immediate moment when a person encounters another randomly in an odd place in a transient time zone... Body, face, voice, and action in an immediate moment inspires us like static electric goes through out body.... The action taken by the person was not special, but something like a special spiritual contact certainly took place. It took place in an unusual place. I felt a unique shock when I entered into the space where is isolated from a repetitive daily life. It was like going into a hidden place in a darkening shift from day to night where the unknown mystery is hiding in...

When there is an opportunity to communicate with people from different civilisations, ethnicity, and religions (or ideologies), it makes more possible to feel and understand the quality of soul human-beings are endowed with. Then, it makes also possible to observe the soul of others from our own native background. This experience may lead us to either gain a confidence or become disappoint in people and civilisation of our own. The true strength of human-beings may come from such a quality of soul: The guarantee of obtaining the true happiness and the long term survival of this person and his/her family shall depend on the quality of soul regardless of their physical strength, material wealth, intelligence and knowledge, authority, recorded historical backgrounds, and pleasure coming from subordinance...

The strong soul with a good quality will make a strong sense of feeling a spirit revealing out from each human-being. The characteristic of these spirits can be either weak or distinctive. Human-beings with a weak spirit are those who are made to live rather than live themselves: They live as though they are died. The distinctive ones are either cursed or vital. Cursed spirits harm others by encountering them. The human-beings with a cursed spirit harm us even though they protect us with a physical strength, distribute us an abundant material wealth, provide various kinds of knowledge with their intelligence, hold a strong authority over us, record a long history of survival, and subordinate us to please us. By contrast, the human-beings with a vital spirit lead us to a miracle. The human-beings with a vital spirit impress us even though they are deprived of physical strength, material wealth, intelligence and knowledge, authority, and prideful history, and ability to subordinate.

As Greco-Roman philosophers argued, a priori of human-beings' quality is their soul forming their spirit. We cannot change the quality of our soul within a short time period. The quality of soul is built in our innate nature such as our environment surrounding us, family, culture and civilisation we are from, and the luckiness to have an opportunity to encounter with those who improve our soul. Those without spirit are gradually ceasing away; those with a cursed spirit are rotten in their life and/or starve until they die; and those with a vital spirit thrive with hope even in poverty, deprivation, oppression, and fear...!

My EuroProfiler's test result

2011-11-17T05:38:00.000-08:00

* You can take this political compass test of EU parliament at http://www.euprofiler.eu/
It also shows different parties in EU member countries.

OMG! I am categolised to be closer to British Labour party!
Well, the left-right scale (written as "social scale" in this spectrum) does not differentiate economic and moral scale.
For example, when Labour is 3 point to the economic leftist and 5 point to the moral rightist, and I am 5 point to the economic rightist and 3 point to the moral leftist, they calculate both Labour and me to be 2 point to the social rightist ( 5 moral-rightistness minus 3 economic-leftistness for Labour; 5 economic-rightistness minus 3 moral-leftistness for me)

This chart shows my policy is different from British Labour's

This match-making chart indicated that the UK party which is closest to my political ideology is the UKIP (UK Independence party) although I scored relatively pro-European lol

By the way, the closest political party to me within EU parliament is "Alternative Liberty party" in France, which makes sense,

I can be relatively pro-Europeanist. But, I only support the European integration as long as they avoid EU becoming a united socialist republic, liberalise their economic policy (eliminate the power of national trade unions, flexibilise labour mobility, and reduce reliance of social policies on the public sector economy), and standardise their public and corporate financial trade roles. At this point, I can be close to Labour. At least, I am happy to be categoliesd as neither intuitive Europhiles such as Lib-Dem nor hypocritical socialists such as Green party and Scottish Socialist.

Yeh, Schengen treaty is a wonderful policy! I just really want the EU to revise Maastricht treaty about national economic policies. I actually support centralising the financial regulation rules conducted by EU federal government (not yet built, but inevitable and necessary to be built) a central super-state authority.

I am sort of supporting the EU integration for more right-wing ideology such as supporting free labout and capital movement, eliminating national trade union bargaining power, and reducing the power of each individual national government (E.g. Abolishing the right of incurring national debt for public financing) and nationalism (Ethno-centrism and Altruistic-Patriotism).

I strongly support the EU scale version of Mrs. Thatcher kinda comes into the power in the European central government!

Political Philosophical Compass (Spectrum) --- Part 3

2011-11-06T01:03:00.000-07:00

... contuned from Part 2:

Hobbes' work had influenced many remarkable political philosophers such as John Loche, David Hume, and Jean Jacques Rousseau. As Loche's philosophy highly influenced David Hume, and Jean Jacques Rousseau, Jeremy Bentham and Immanuel Kant, it can be said that Hobbes, who influenced Loche, influenced Jeremy Bentham and Immanuel Kant as well. All in all, without Hobbes. all these political philosophers in the modern time period would not have existed. In other words, all these modern political philosophers' works were the footnotes of Hobbes' work.

Hobbes had learnt from a lot from two mainstream Antiquity philosophers, Plato and Aristotle. He adopted a theory of Platonian ideal state and Aristotlean virture theory to his own philosophy. However, the clear distinction of Hobbes from these two Antiquity philosophers is that he had never considered what the true moral should be. All philosophers previous the modern ones, not only Plato and Aristotle but also the other ones having existed in the previous and the later time periods, always considered what is the nature of human-beings should be and what is the moral objective of human-beings. Furthermore, majority of these Antiquity and Medieval philosophers always tried to define the existence of the universe and how outcomes of this world are derived to form the universe. One of the few remarkable philosophers who were more apathetics about clearly defining the existence of the universe was Macus Aurelius, the Roman Emperor. Marcus Aurelius stated that the universe is formed by the random outcomes which we cannot exactly discover what and how these outcomes are derived from. Although Marcus Aurelius did not stick to spending a lot of time on defining the existence of the universe, he still yet put emphasis on the universal moral which human-beings ought to follow. As same as Marcus Aurelius, Hobbes also thought the universe is composed of the random outcomes derived from unknown reason. But, unlike Marcus Aurelius, Hobbes did put emphasis on neither the universal moral human-beings ought to follow nor how human-beings ought to be regardless of different situations across time, place, and occasion. Meanwhile, all these Antiquity and Medieval philosophies are solid, synthetic, and focusing on a massive picture, Hobbesian philosophy is flexible, analytic, and focusing on human-beings and their cummunities by parts.

Hobbes insisted that human-nature is permanent and cannot be changed as same as Aristotle mentioned. This aspect shows Hobbes is moral-naturalist as much as Aristotle. But, Hobbes was certainly modest about human-nature than Aristotle. Aristotle stated human-beings are naturally social so that they can govern themselves by letting them alone to decide what to do. By contrast, Hobbes did not agree with what Aristotle defined human-nature. Hobbes claimed that human-beings will hinder each other when there were no particular role to order them to be harmonised, and then fall into chaos. Hobbes strongly put emphasis on necessity of strictly coded laws which bring an order to govern human-beings instead of expecting the human-nature to self-govern human-beings. Laws are created differently according to what form of laws is suitable for different time, place, and occasion to bring an order. Unlike Aristotle put emphasis on the moral objective as "being social" to be humans, Hobbes argued that needs to be good human-beings are different across time, place, and occasion. In addition, there is no clear objective measure to define what is the moral for human-beings to follow. Only the objective for human-beings is to follow the laws bringing them an order whose objective measure also depends on time, place, and occasion. This aspect makes Hobbes to be more subjective than Aristotle, but it yet remains a little objectiveness than Machiavelli.

Hobbes quoted a lot of phrases from Aristotle such as human virtue. Aristotle explained human-beings' virtue is to do what they are good at. Hobbes stated the ultimate virtue which is common among all human-beings is obeying laws and following order. Aristotle was more optimistic about direct democracy which enables all human-beings represent their opinion equally as much as possible. However, Hobbes was highly sceptical about Aristotlean direct democracy due to the problem to work politics out effciently and defining whose opinion is more legitimate than the others when they fall into conflict of decision making process.

Plato, Aristotle, Augustine, Aquinas, and Machiavelli drew a picture of human society by means of the nature of human-beings and how human-beings should be. Hobbes seems to the first person who mentioned something other than human-beings themselves, their nature, and the community structure. He was the first person who mentioned the existence of "law" to be a foundation of moral among human-beings and a stabiliser of their community. The philosophers previous to Hobbes did not consider about how law is given by nature, guardian, people, God, and/or sovereign, and did not define what and how law should be. Hobbes was the first
political philosopher who insisted that political philosophers whould firstly think about and define what is law before thinking about to know about human-nature, how community should be structured, and the existence of the universe. Plato talked about rationality when he talked about ethics (political philosophy). However, unlike Plato, Hobbes did not expect all people to be rational enough to establish an utoppia. Hobbes argued that it is impossible for all people to become perfectly rational beings, but people will be happier and their community will be stabilised as long as the law and the structure based upon it they are following are rationally constructed. Thus, rather than expecting human-beings and talking about an alternative world, Hobbes was the first political philosopher who focused on rationality of law instead of rationality of human-beings and a rationally imaged world view.

Hobbes argued that the best virture of human-beings is obeying the law and following the order, and sin is breaking law and order. Many later modern philosophers argued against this Hobbes' argument, but their theories seem to be just an different interpretation of what Hobbes said. These philosophers agreed with Hobbes for the point that political philosophies have to take an account of rationality and law (including physcially enforced, written, natural=spontaneous and/or any other form based on either a subjective feeling or an objective principle) in order to study about people, their community, and how they function. Therefore, they took a lot of ideas from Hobbes, and reformed Hobbes' theory into their own style.

Hobbes required to have an autocratic institution who is responsibility for legislating the law enforcement, and a strong charismatic sovereign, monarchy and/or any other form of premiership, who represents as a top authority of the autocratic institution. As long as law enforcements created by the autocratic institution are rational and the charisma of a sovereign attract both the institution and people obeying their order, the system will be stabilised, Hobbes argued.

By contrast, Loche, Hume, and Rousseau claimed there should be another form of body ensuring people following the law to stablise their community under order. These philosophers challenged Hobbes' authoritarianism, and suggested to create another form of principle brining an order rationally instead of relying on a strickly stratified autocratic system. Loche insisted on the fundamental principle of morality and the consitution defining what laws should be to convince people to follow. Hume claimed that there is a natural law people naturally adapt to keep themselves under order. Rousseu put emphasis on the existence of the "spontaneous" order which is different from the "enforced" order.

... to be contuned to Part 3:

Milton Friedman attacking hippocratic socialist medical service

2011-10-31T05:20:00.000-07:00

This is a fabulous lecture criticising an overly state controlling health (medical) service. This clarifies why free market system is not bad for medical industries to operate unlike what socialists and any anti-freemaketists and financial repressionists describe as. This warns that, when people allow medical services to be marged into the public sector and the degree of government controll increases, peole rather suffer than gain benefit in spite of what socialist government promises.

Islamic World Political Compass

2011-10-29T05:37:00.000-07:00

Majority of people outside Islamic world tend to be ignorant about the political ideology of the political leaders in the Middle-East, South East Asia, West Asia, Africa, and the Western world. Some Westerners claim that Osama bin Ladin and Saddam Hussein cooperated together but it would be impossible. Osama bin Ladin and Saddam Hussein have a totally different ideology from each other, and they had never seemed to be able to cooperate together.

Osama bin Ladin was an Islamic conservativist who detested combining Islamism with any modern political ideologies such as socialism, pan-Islamism (United Islamist nations), and political party ideology. Osama bin Ladin formed his own politically influential groups such as Taliban and Al Qaeda. But, his initial aim was to establish individual people and their community following the traditional Shariah law, and keep them away from modern politics. Unlike Sadam Hussein and Colonel Gaddafi, Osama bin Ladin was not interested in modern ideology such as either forming a strong iron fist political party for himself such as Hussein did or establishing a political community gathering different people from different nations to be unified under a strong modern political administration such as Gaddafi did.

By contrast, Saddam Hussein was a hard core atheist and highly influenced by the USSR communism. Even though Hussein persecuted all members of Iraqi Communist Party, his political ideology was a resemblance of Stalin's. As same as the communist nations' leaders such as Stalin and Mao Zedong, Saddam Hussein wanted his nation to follow him and his iron fist political party by admiring his charisma. If there were an Islamic worship in his nation, the loyalty of his nation to him and his political party would decline because people no longer worship him and his party as a Godly charisma.

Nowadays, the movement to use Islamisn as a tool to establish the modern nation state or a tool to fight against the political oppression. Therefore, some people tend to think of Islamism as a sort of the modern political ideology. However, although the original Islamism takes account of economic, cultural, and metaphysical taughts, the style of Islamism is different from some Islamic political thinkers nowadays regard. The modern political ideologies focus on analysing how individuals live in and react to law, legislation, monetary economy, fiscal policy, and ideologies political parties hold, and attempt to establish these systems which are more likely to stabilitise a community where individuals live in, benefit to particular one individual or a group of individuals, bring a high level of utility to individuals living in a community, and/or gurantee individuals' right. By contrast, the traditional Islamism focuses on how individuals are living supiritually well regardless of how their surroudings are in order to accomplish what God wanted human-beings to be, and only created their own law as a principle guide line for them to live for their God's sake. All in all, the modern political ideologies regard the law to be a contract between individuals themselves whereas the traditional Islamic law (Shariah law) regards the law is a cntract between any individual and God.

The modern political ideologies regard human-beings are well-determined, semi-rational, and consistent enough to follow their own decision based on their needs, wants, and values. Therefore, they trust in the contract with only human-beings without will of a super-natural supreme-being. This trend is high influenced by the Christian way of thinking which claims the worship of God and religious taughts should be separated from the secular authority, law, and custom in order to keep the religion from interests of the secular world. Thus, as the modern political ideologies were highly inflenced by Christianity, even though some of them were highly sceptic about or even strongly against Christianity, so that all people following the modern political ideologies are influenced by this separatino of the religious world view and secular world view. This aspect motivates individuals to create their own moral, law, legislation, their own ethics about monetary economy, fiscal policy, and their custom and culture by human-beings' own decision based on their needs, wants, and values.

All the traditional Islamists, who are not only Osama bin Ladin and the fundamentalists but also all the genuine Islamic people following the traditional Islamic way of living, believe that individuals are too weak and inresponsible to establish the order. Therefore, the modern political systems based on the contract between individuals is too weak and inconsistent to be maintained so that these systems eventually corrupt individualsm, instabilise their community, and spoils their soul. This is the aspect that the traditional Islamism is sceptical about allowing human-beings to create their own moral, law, legislation, their own ethics about monetary economy, fiscal policy, and their custom and culture by human-beings' own decision based on their needs, wants, and values. These Islamists put emphasis on the importance of the interaction of God's will as a mediator of human-beings' own decision based on their needs, wants, and values. It means that individual human-beings make a contract with God at the first stage, and then agree or disagree with the other human-beings. This characterisitics denies the existence of the modern political ideologies, which over-estimate human-beings and their decision making process as explained previously, take place in their community.

Osama bin Ladin was one of these traditional Islamist who are highly sceptical about the modern political ideologies which over-estimate human-beings. This aspect explains that he wanted to react against this tradition to bring the traditional Islamism based on the contract between individual and God (The super-natural), and was highly sceptical about individuals and the modern political contract.

The modern Ismamic political activists combined the modern political ideologies and the traditional Islamism together.

Colonel Gaddafi attempted to combine Socialism, the modern Western political ideology, with Islamism together. His aim was to unite people by both the modern contract between individual people and the Islamic contract between each individual and God. Gaddafi combined the ideology about the the equality among people insisted by the Western socialism and Islamic tought insisting all people are equal in front of God. His original aim was to put emphasis on the equality among people to attract his supporters and alliance nations to him.

Malcolm X, in the United State of America (USA), was also the one who combined the modern political ideology with Islamism. He combined the human right idea invented by the Western modern ethics and Islamic attude of anti White suprematist Christinamism (* Only mentioning a particular kind of Christian groups). Malcolm X thought highly of protecting the individual right stated by the modern political philosophy which is formed by the contract between individuals in their secular law. However, he also thuoght that the equity (fairness) of this contract was violated due to the situation that some human-beings are not considered as variable to be treated fairly. Then, he thought all individuals living in a community need another form of strong doctrine which implant the idea of all individuals' right into their mind. His choice was Islamism which claims all human-beings are equal in front of God, and always put emphasis on the interaction of God's will while human-beings are making any contract.

The problem of these modern political figures is that both could not develop their political ideologies to be influential in a long term. We are not sure whether Gaddafi once had a strong altruism to use his political ideology to unite people and put the equality policy into practice or he initially wanted to use his ideology just to attract people to obey him. Nonetheless, regardless of what he might have initially thought, he turns up to be very corrupted,and operated the policy which was very different from what he promised people to bring. Malcolm X 's policy was so violent that it turns up to become a descrimination using an anti-descriminational ideology. These two were so idealistic and aspired to establish the community which precisely follows their idea that they could not tackle with obstacles in the reality. Furthermore, both Gaddafi's Socialist Pan-Islamism and Malcom X's Black Islamism cannot be accomplished because they combised two different kinds of ideologies, the modern political ideology and Islamism, which regard of a totally different world view from each other as explained previously.

Sukarno, the founder of independent Indonesia, was much more able to achieve to combine the modern political ideology with Islamism. The reason is that he remainded his political ideology, the Islamic State Socialism, only in a constitutional level. Sukarno was pragmatic to put his policy into practice. Unlike Gaddafi, he did not rant his political ideology as if it brings a utopia, and rationally faced with realities. Unlike Malcom X, he did neither violently exaggerate nor enforce the equal right as a fundamental objective to be accomplished. He only refered to the principle of equality, right, and islamic ethics as the objective guide line (not the way it must always be).

Nevertheless, both the fundamental Islamists such as Osama bin Ladin, and the genuine traditional Islamists may say that marging Islamism into the modern (Western) political ideologies lead people and their community far from what Islam treaches. The original Islamism insists well-beings of people come into reality when people in their community become supiritually well by being aware of the contract with God; not with the contract with the system human-beings established themselves. So, they would not want Islamism to be used as a tool for someone who wants to establish a system to rule the others under his/her administration even though the ideology held by this administration sounds wonderful. Therefore, United Socialist Pan-Islamic nation invented by Gaddafi would not be able to convince these traditional Islamic people. It is agaist their theory to exaggerate the right because their religion teaches the nature in this world is severe so that we need to take for granted. Therefore, the hatrate against the oppression to the individual right is unproductive so that they would not agree with Malcom X. They may say that Sukarno's policy was practical to develop a nation where protects Muslim people's life style, their interests, and their material well-being, but does not particularly follow precicely how Islamism requires people to do....

All in all, Islamism is a complex religion, and a mysterious ideology at the same time. In this globalised world where the way of all political systems work is based on the modern (Western) political philosophies (ideologies). Some attempted to use both Islamism and the modern political philosophy together to administrate their own nation. However, the fundamental problem is that Islamism involves a totally different basis of philosophy which may never be harmonised with the modern political philosophy (ideology). Thus, both Islamic fundamentalist, who aspire to enforce people and their community to follow the original traditional Islamist practice, and genuine traditional Islamic people, who just want to keep their own Islamic life style whose Islamic identity is not diluted by adapting the modern (Western) life style, isolate themselves and their community from the influence from any modern political ideologies and the globalisation. This segregationist method has a problem causing a huge tention of conflict between themselves and people from outside their community. Hosni Mubarak selected the alternative way which does not use Islamism in politics. Mubarak operated a rational and secular political administration which can adapt into the current globalising world trend to both protect and develop his own nation. Unlike Sukarno, Gaddafi, and Malcolm X, Mubarak considered Islamism is not practical to be combined with the modern political ideology which bases the philosophy to operate the political administration. Furthermore, Mubaraku realised the global free market system is beneficial for his nation and people living there. So, socialism is a hindrance, and Islamic intervention in his nation's political administration (Although he did not think Islamism is worthless; He admitted Islamism thrives). Hence, although Islamism is respectable religion and an interesting ideology, it seems to be still troublesome to be used for a principle basing any political administration. It will be interesting how Islamism become evolving to be adopted into the political administration in the future though.

What our great Adam Smith said about Scotland, Britain, and Europe

2011-10-25T05:07:00.000-07:00

Our great Adam Smith said Scotland should be unified in order to expand the economic scale, but the power of government should be minimised, quality of education should be measured fairly (Adam Smith explained that, although Glasgow university had lectures in 5 days a week whilst Oxford university had lecture once a week (Students in Scotland were more diligent than English ones, he said at that contemporary time period), English one was always seen as superior to Scottish), and ethnocentrism of English should be eliminated. Our great Adam Smith insisted that "Keep unified but let them do (Laissez-faire)". This is the key element for Scottish, British, and European issue. Conservative party ethically too centralises Britain into Westminster. Labour party does not agree with the idea of laissez-faire (Labour always prefer the centralised fiscal policy). Lib-Dem does not plan rationally nor responsibly, and always only flirts to attract the attention from the others such as swing voters and EU central government. SNP abandons a huge socio-economic scale which could be exploited in the unification. Isn't there any true rationally organised and planning laissez-faire party which is different from the US libertarian banditism in this world? My idea is a laissez-faire policy which rationally, responsibly, and pragmatically (get an idea and a real connected!) considers how system should be constructed. :)

P.S. A comment about Scottish devolution:

Scottish or any national independence is already an old idea. The most trendy idea nowadays is the border less, global, and multicultural. The category of national administration such as unitarism, federalism, and statism are already in an old updated idea. The economic and social trend is so contingent to the wider scale than the past that regional and national administrations cannot follow to control over. This current time period is a transition to decline of the power of nation states. Therefore, Scottish, British, Japanese, and any nationalism is nonsense and old fashioned....

Three Dimensional Political Spectrum

2011-10-15T10:05:00.001-07:00

* Prevalence was calculated by multiplying the percentage possibility of policy existence and the percentage of people gaining utility from policy. The level of prevalence becomes higher when the colour become closer to red / orange whereas the level of prevalence becomes lower when the colour becomes closer to pale blue. The higher prevalence means possible to both exist and please people whereas the lower prevalence means less possible to either exist or please people, or both.

* Economic scale shows the size of government and adaptability to the market mechanism. More authoritarian implies big government controls economy. More libertarian implies little or non government interaction exists, and adapting rationally to the natural flow of marchet mechanism.

* Political scale shows the degree of freedom from the political peer pressure such as a unified political ideology, an political institute, and a powerful minority group such as a religious institution and a capitalist corporation. More authoritarian implies people are encouraged or enforced to follow the political peer pressure. More libertarian implies that people are more self-governing themselves.

* Personal scale shows either community/group interest or individual interest prevails. More authoritarian implies the community/group interest comes faster than the individual interest. More libertarian implies that the individual interest comes faster than the community/group interest.

"Fat tax" by Danish governmet penalises poor, reduces the utility of all citizens, and invades freedom of choice!

2011-10-02T07:39:00.000-07:00

Referring to BBC News Europe: Fatty food tax' introduced in Denmark

It's NOT a right idea! This policy increases stresses of people! Consuming fat foods actually reduces the over eating because the fat makes our appitite satisfied, and increases a comfort in our brain! This policy is just tax tax tax tax for good good good reason only for the government ego sacrificing individuals' ego!! Freedom choice is invaded in these Scandinavian nations...!

There is a historical fact proving these fat foods are "healthy" in Japan. When Japanese diet changed to eat more these fatty foods, Japanese risk of suffering from tuberculosis went down dramatically. When people started to eat these fatty foods, the intelligence level went up because people started to consume cholesterol which our brain cells are composed of!

Even though Scandinavian nations plan to help poors by keeping the high government expenditure on welfare, this policy in fact penalises the lower income citizens! The reliance for the lower income citizens on fat is high, and important to maintain their good health! Only the people who suffer from consuming these fatty foods are the middle and high income citizens who can afford to consume "extra". These middle and high income citizens just need to have a better knowledge of their diet. But, generally speaking, reliance of the educated middle and high income citizens on the fat is not high relatively. So, the tax effect is not high for these middle and high income citizens (as long as they are knowledgeful enough to be able to balance their diet). The problem is to the lower income citizens. The tax burdened on these people definitely reduces their disposable income or their necessary amount of these fatty foods! Furthermore, although the middle income people may be less negatively affected by this tax than the lower income citizens, the utility of the middle income citizens will go down. The middle income citizens still consume these fatty foods because all human-beings need a certain level of these products. Therefore, it also reduces the disposable income of not only the lower income citizens but also the middle income citizens!

What Danish government says is totally opposite from what they expect expecially for the lower income citizens, and tries to make an excuse to take more tax from the middle and high income citizens!!!

Political Philosophical Compass (Spectrum) --- Part 2

2011-09-19T05:05:00.001-07:00

... contuned from Part 1:

2: From the late medieval to the modern:

Machiavelli openned the gate way from Antiquity and Medieval to the modern political philosophical world. There is no doubt that Hobbes was inspired by Machiavellian philosophy to write his Leviathan. All remarkable modern political philosophers were highly influenced by Hobbes so that it may be possible to say that all these philosophies were merely the footnotes of Hobbes's work. If Hobbes was the founder of the modern political philosophy, Machiavelli would be the person who evolved the political philosophy from the old Antiquity to the progressive modern philosophy.

Machiavelli's ethical focus was how individuals should act owing to the surrounding evnrionment. Machiavelli had ever mentioned about neither the ideal world (Utopia) nor how human-beings ought to be naturally. His philosophy is about deriving the optimum solution for each different individual to act according to their own individual subjective interests regardless of an objective moral principle. His book called "Prince" indicated how a nation, the community of human-beings, and her sovereign such as a monarchy and any top political leader should act like. Machiavelli's success was having simplified the method to consider and analyse how the world is formed and how the human-beings ought to be.

All Antiquity and Medieval philosphies were too complex to analyse the decision making of human-beings. These ancient philosophers always started imaging about the world and and the moral judgement from thinking about the universality and the essentiality of human-beings.

By contrast, Machiavelli started to argue about political philosophy (Ethics) from the individual subjective interests rather than an objective moral guide line stated by Plato (as Idea) and Augstine (as God), and a metaphysics by Aristotle (as the nature (essentiality) of human-beings and their community) and Aquinas (as Natural law of human-beings and Divine law of God). Machiavelli could be one of the first political philosophers who invented the "moral relativism" which denies the existence of Utopia, the absolute universal value of moral judgement, and the essentiality of human-beings.

In terms of Machiavelli's world view, individual human-beings should act by following their expected merit gained from their action, so by neither the ideal moral guideline nor how human-beings ought to be naturally. The merits mentioned by Machiavelli are security (protection) of individuals, their family, and their significant others, material gain, full-filling desires, admiration to charisma (beauty, masculine power, authority, family-tie, friendship, and something related to self-identity).

Only the objectivity mentioned by Machiavelli was the power of an authority with these merit. The one holding a high level of these merits is the one who control the most. Machiavellian philosophy of measuring these merits is highly subjective and varies across time, place, and occasion. Unlike Platonism and Aristotlean, Machiavellian does not have an universal objective measure to tell what is right and wrong. The judgement highly depends on how human-beings can see and feel at their moment. Thus, Machiavelli is one of the most subjectivist philosophers because there is no objective principle to measure the volume of these merits; only the measure is human-beings' sujective sensation.

Machiavelli regarded the essentiality of human-beings is the instinction that they follow the charisma and the merits they can immediately see. However, unlike Aristotle, he did not mention all the human-beings are naturally same. Machiavelli regarded the quality of human-beings varies across their endowed talent, family, ethnicity, civilisation, and their sovereign they obey. All in all, Machiavelli saw human-beings have a natural instinct to follow the charisma. Nonetheless, Machiavelli seemed to believe in the evolution of human-beings to the next step and the alternative world more than Aristotle did. Unlike Aristotle, Machiavelli aspired to create a new ideal world although it was not strong desire as much as Plato did. Machiavelli seemed to have thought that if the strong and admirable charismatic sovereign could have existed and prevailed in this world, the better alternative world could have existed. However, Machiavellian world view is still based on the assumption that, although human-beings maybe able to create an alternative better world, the instinction of human-beings will not change.

He regarded highly of the existence of a sovereign (monarchy and any other form of political leadership) who ought to possess a high level of these merits. The interesting fact of Machiavellian philosophy is that, although Machiavelli put a high priority on the existence of sovereign and supported the position of sovereign should be inherited, he claimed that the one who becomes a soveign and his/her family has to possess these merits he mentioned. Therefore, he seemed to have criticised and contradicted the existence of the sovereign who lacks all these merits he mentioned. Furthermore, although the position of the sovereign must be inherited, the family of this sovereign has to have an ability to keep the high level of these merits to inherit. Thus, Machiavelli seemed to have used a rhetoric to criticise the existence of monarchy by pretending the existence of monarchy. But, we never know whether Machiavelli was a supporter of monarchism or a critic of monarchism.

Hobbes seemed like to have taken over the philosophy of Machiavellian moral relativism and optimum decision making based on a subjective interest of individuals and a nation, the community. On the top of his emphasis on the moral relativism and need of the powerful authority, Hobbes offered more mathematically and logically structured analyses of political philosophy than Machiavellian. Hobbes regards that there should be moral codes which guide human-beings to establish a stable and cohesive community.

Hobbes was more realist than Machiavelli. Unlike Machiavelli, Hobbes did not believe in the ideal sovereign with a full of the merits Machiavelli mentioned. Although Hobbes admired the power of a charismatic sovereign, he assumed that it is impossible for the sovereign be powerful and charismatic as much as Machiavelli described. The main reason of this difference between Hobbes and Machiavelli is that Hobbes did not believe in the evolution of human nature. Although he insisted that a sovereign should be powerful and charismatic as same as Machiavelli did, he assumed that it is impossible for a sovereign to be always an ideally powerful and charismatic. This is because sovereign is also a human-being, and can be corrupted if there is no rationally coded law guidling people and their sovereign. Machiavelli regarded that a good sovereign makes a good law whereas Hobbes argued a law should select and keep a good sovereign. All in all, Machiavelli seemed to have thought that, although the essential human nature would not change, there would be an non-naturally superior individual who could be a sovereign ruling over the others. By contrast, Hobbes had never believed in any non-natural human-beings at all, and a sovereign is naturally a same human being as same as other individuals.

Instead of the supremacy of a sovereign that Machiavelli insisted on, Hobbes put emphasis on the "legitimacy" of sovereign, and the strictly coded rational law should define the legitimacy of sovereign. Hobbes argued that human-beings need a strictly coded rational law, they should be guided by its legal system. He claimed that the "law" based on rationally (neither superstitiously nor intuitively) constructed codes is the universal moral principle. He argued the rule under this law could actually measure whether human-beings' decisions are morally right or wrong. Hobbes puts emphasis on the obeying "order" rather than charisma. Hobbes did not regard there should be always a perfect charismatic sovereign, whom Machiavelli admired, as long as the stability of humans' community under the law guideline is guaranteed. Unless the sovereign is really useless enough to collapse one enitre civilisation, s/he should reign.

This aspect that Hobbes supported there should be a rationally coded law (legal system) guiding human-beings as a universal principle indicates that Hobbes is more objective than Machiavelli. Machiavelli claimed that action and decision of human-beings are judged in terms of human-beings own feeling, desire, admiration, fear, and all the subjective feelings at any different time, place, and occation. Hobbes agreed with this Machiavelli's point. However, this is not enough to guide human-beings to establish a stabile civilised society which Hobbes considered as necessary for all human-beings. Hobbes strongly required the existence of a strictly coded rule under a rationally constructed legitimate law, and despised superstition and intuitive rules. Machiavellian philosophy still allows either a sovreign or a legal system to be driven superstition and intuition if human-beings and accept to exist. By contrast, Hobbes highlighted that an existence of secular (not superstitious) and rational (not intuitive) law as an objective measure and a universal moral principle.

Both Machiavelli and Hobbes thought a unity of human-beings could be achieved by allowing human-beings' subjective interests to be competing each other, and then the physically strongest, the most charismatic, and the wisest one to win. Both of them thought highly of the natural selection that determines which moral decision is right and wrong when two or several moral decisions exist and decision makers have to decide any one of them. One of the measures of the natural selection is individuals' merit to the others. It indicates those who have more merit than the other shall rule the others.

Although Machiavellism and Hobbesian are authoritarianism as same as Platonism, Machiavellian characteristics is totally opposite from Platonian characterisitics. Plato said the authoritarian heirarchy should be established by following the ideal structure in order to create an ideal world i.e. Utopia so that he claimed that possition of individuals in their cummunity "should be re-shuffled" to re-allocate them owing to their merit accomplishing to establish a Utopia. On the other hand, Machiavelli and Hobbes had never believed in Utopia. Both of them regarded that all individuals' status is "already" given to all individuals owing to the merit distrubuted to each individual by following the natural selection. Machiavelli believed that the natural selection prevails whereas Plato believes the natural selection is not an ideal. In addition, Plato believed there is an absolute universal objective moral guide line whereas Machiavelli and Hobbes regarded that the moral is relative to time, place, and occasion. Furthermore, unlike Aristotle, Machiavelli and Hobbes had never mentioned how human-beings ought to be by nature (Aristotle is more objective than Machiavelli and Hobbes because Aristotle believed there is an objective scale to what human-beings ought to be although his objectivity is not strong as much as Platonian philosophy.

The interesting aspect is that, meanwhile Platonists, the moral universalists, and these two moral relativists (Moral value is a subjective matter and is derived from the human-nature) have an opposite philosophy on the spectrum from each other, both of these opposing groups strongly necessarity and inevitability of the existence of an "absolute authority".

... to be contuned to Part 3:

Political Philosophical Compass (Spectrum) --- Part 1

2011-09-18T20:11:00.000-07:00

This is a spectrum allocating major political philosopher (Ethical Philosopher) on according to their thought on the world and the moral judgement.

The vertical axis is the objective v.s. subjective scale which measures whether the moral judgement is based on an objective measure (coming from outside human-beings' emotional feelings and a psychological matter) or the moral judgement is merely a psychological matter so that no absolute objective moral guide line is possible to exist.

The horizontal axis is the non-natural v.s. natural scale which measures whether the alternative better world can be created and the human soul can evolve to become better or the nature of human-beings is permanent and hardly changes.

1. In Antiquity and Medieval:

First of all, the classical example of comparison between political philosophers is the comparison between Plato and Aristotle. There is no doubt to say that the comparative study of philosophy started from Plato v.s. Aristotle, and all the comparative studies of philosophy cannot ignore the debate on Plato v.s. Aristotle. Meanwhile these two philosophers existed in the same time period, one of these two has a totally different ideology from the other.

Plato is the most notable objectivist and non-naturalist in the Western philosophical world. Plato believed there is an ideal community (the utopia) can exist, and existence, morality, and mind-set of human-beings can evolve to be better (by means of how Plato defines what is better and worse). He also claimed that there shuold be a strong, absolute, universal, and permanent moral principle which shall guide human-beings to evolve.

Plato also argued that a supreme (as he defines) group of human-beings should be the leaders who quickly learn and understand the absolute moral principle and overcome from the human nature (evolve from the real state to the ideal state). He also claimed that these leaders should guide the other inferior human-beings, who are difficult to evolve to the ideal state.

By contrast, Aristotle questioned if human-beings are able to find the absolute and permanent moral principle guiding how individual human-beings should be. Aristotle stated that the value of morality varies across the different time periods, places, and cultures. Aristotle also claimed that human-beings is naturally able to guide themselves to the optimum way of living in their community. "Human-beings are naturally social, and political-beings" is his famous quote which denotes that individual human-beings themselves should constantly discuss and evaluathe their moral decision, and then decide what is right and wrong at the current time, place, and occasion.

Aristotle contradicted Plato because Aristotle argued that human's characteristics constantly changes over time, place, and occasion. Therefore, even though some individuals have a strong enthusiastic altruism, ability to guide the other individuals to the principle, and a deligent hardworking spirit, these individuals can be corrupted when they start to hold a power to control over the others. Furthermore, Aristotle also clarified the fact that all the communities in the world have different needs, and all the individual human-beings' opinions have to be represented. Thus, there shuold not be a few number of individuals controlling over the others because there is no absolute measure to define which is better and worse.

Only the universal objective principle Aristotle mentioned was that "human-beings are naturally social". This quote states that, even though the moral value varies across time, place, and occasion, all human-beings in any parts of the world are essentially same. He affirmed that all human-beings must live together. Otherwise, human-beings turn up to become a beast (savage). This is the aspect that Aristotle was one of the first remarkable philosophers who put emphasis on the cosmopolitanism. As all human-beings can nagotiate each other to derive the optimum solution to be united, they can live together with peace and unity.

This philosophy states that the world is constantly changing, and human-beings can be unified when they nagotiate each other. The problem of this philosophy is that it does not clarify how the world changes, and restrict the possibility of new discoveries because humans' perspective to only focus merely on how the things surrouding them are. This problem disrupts human-beings discovering and inovating new things and thoughts and beciming sceptical about how the real world is formed. Furthermore, human-beings from the different culture may bring further conflict rather than unity. When both parties are considered equally right and wrong, they may never compromise their own wants and tolerate any negative feeling (E.g hatred, stereotpy, mis-understanding, and biological and emotional sense) about the others. Thomas Aquinas, who adapted Aristotle philosophy into the primative Christianity to reform Christianity be more familiar to the commoners, stated, on the top of the human-naturality, there is a God's divinity as the "unmovable mover" which is the principle, denoted by Aristotle, which is only a universal natural law but too abstract to define. Aqunas's philosophy developed Aristotalian philosophy to be more clear and judgemental. However, Aqunas's philosophy still restricted the possibility of descovery and inovation.

At this point, Platonian philosophy has a stronger advantage because Plato put emphasis on need of the absolute objective judgmental tool measuring which individual human-beings are right and wrong.

However, these classical philosophers had never answered to find whether or not it is possible to find an objective moral measure and principle within the human-nature. Plato and Augustine, the founder of Platonistic Christianity, definted an objective moral guideline is not able to be measured by natural human-beings so that it should be created by a non-natural supreme-being such as an idea or a God. On the other hand, Aristotle and Aquinas remained the political philosophy (ethics) to be very limitted on the world we can see now so that there is no place for deduction which forecasts the past and the future. Platonist focuses on the unreal world whereas Aristotlean only focuses on "now". Both philosophy lack the consistent and dynamic analysis of how humans and their community can change.

In addition, there is a question by some of the modern philosphers which asks whether or not it is possible expect human-beings to be virturous enough to keep themselves ethical and unified constantly. These modern philosophers criticised that both Plato and Aristotle were too optimistic about human-beings, and so contradicted there cannot be any universal objective moral (ethical) guide line like what both Plato's Idea (Augstine's God) and Aristotle's Social and Political Human-beings (Aquinas's Divine Law).

... to be contuned to Part 2:

Empirical evidence prooving Liquidity-trap: Lower interest rate does not stimulate economy

2011-09-04T07:13:00.000-07:00

Why is the economic recovery not stimulated even though the central banks offer the sizably low interest rate which is close to zero? Many people imagine that if the interest rate is low, the economy should be stimulated. The reason is that the cost for companies paying the interest rate of their debt and for entrepreneurs planning to borrow money to start their new business is low.

However, this is only the microeconomic factor, which is a static analysis focusing on the individual economic agent's performance, and does not take account of the time effect and the environment interacting with this agent's performance. This means it ignores the macroeconomic factor which is the dynamic analysis taking account of the future expectation and the wide scale economic environment.

The problem is that, even though the interest rate, the cost of borrowing, is low, if the expected return from investing to economy is low, banks and the other forms of financial institutions are reluctant to lend their money. In addition, the entrepreneurs are discouraged from borrowing money to invest to their business if the future expectation is not good for their business due to the current economic environment.

This phenomenon is called the "liquidity-trap" which was originally mentioned by Professor John Maynard Keynes. During the world economic depression in 1929, many economists thought the economy would be eventually recovered if the central bank tried to increase the liquidity of money supplied by lowering the cost of borrowing money. However, this expectation did not happen. Keynes analysed this problem by explaining the liquidity of money was stuck in their flow due to the lack of confidence in investment. Keynes also put emphasis on need of the price inflation to increase the investment volume. If the price inflation is taking place, the real value of the money borrowed at a certain past time period goes down, and the nominal value of the revenue gained at each time period keeps increasing (the real value of the revenue is kept almost constant). By contrast, if the price deflation (i.e. the "minus" inflation) occurs, the financial economic situation is the opposite effect of the inflationary period.

This project assessed whether positive or negative the correlation between the interest rate and the investment share of GDP. London Interbank Offered Rate has been newly introduced by the IMF, WEO Database, Country Data recently so this newly introduced variable was used as the variable representing the interest rate. Although, there are only the US and Japanese one for London Interbank Offered Rate, the USA and Japan are the best candidate countries to assess the effect of the liquidity trap because they are experiencing now! In addition this variable is a very useful indicator of the interest rate effect on economy because this interest rate index takes account of the various money transactions between various banks and the other forms of financial institutions.

* "London Interbank Offered Rate" is denoted as "the interest rate" and "the nominal interest rate" in this project.

* There are two indicators of the investment share of GDP. One is "the percentage investment share of GDP times the (natural) log of GDP", and another is "the (natural) log of the GDP times the percentage investment share of GDP"

* All the logalisms used in this project is the natural log.

* These OLS regression analyses are based on the fixed effect model which involves the dummy variables (the binary variable) for the different units (countries).

* The variable called "Time" denotes the time trend whose valometer increases as the time passes.

First of all, the simple Ordinary Least Squares (OLS) regression analysis was run. The investment share of GDP is regressed on the logged interest rate. The result offered is shown in the figure below:

This OLS regression is the percentage investment share of GDP times the (natural) log of GDP:

This OLS regression is the (natural) log of the GDP times the percentage investment share of GDP:

These results show that the positive correlation between The investment share of GDP and the interest rate. It is really disappointing for those who trust the monetary policy of both the current US Federal Reserve Bank and Bank of Japan. It is also surprising for many microeconomic financial analysts because it indicates that the business grows when the cost of borrowing and the interest payment on company-debt is high. This contradicts the basic static ( = nominal) cost and benefit analysis. Thus, these results affirm that we certainly need a complex dynamic ( = real ) cost and benefit analysis.

Is it logical to say that "We should rather increase the interest rate to recover our economy?" No, this is not logical. It is not logical to say "Higher the cost for companies and entrepreneurs is, higher the confidence of consumption and investment is".

This aspect suspects that the interest rate is not exogenous (the condition to be a good explanatory variable not being controlled by any other factors (variables)) so that it can be endogenous (controlled by some other factors. This situation leads the analysis inconsistent if this endogenous variable is used as an explanatory variable).

There is an international financial economic theory stating that the interest rate is given by the exogenous factor we are hardly able to control rather than we give the interest rate to control the economic situation. This theory suggests that the interest rate is set according the price inflation rate to make the real interest rate (the nominal interest rate minus the price inflation rate) to as zero as possible. Therefore, this theory rejects the classical and the monetarist theory of the interest rate which states that the low interest rate lowers the cost for the entrepreneurs i.e. stimulating the economy. This theory claims that the interest rate is an indicator of the price inflation. It means that, when the interest rate is high, the expected rate of the price inflation, which increases the business opportunities, is high.

* This is the theory in the developed economies where the hyper-inflation risk caused by the mal-fiscal functioning tends to be low.

All in all, there is a room to assume that the inflation rate stimulates the investment share of the GDP. Therefore, it tested if the logged investment share of GDP is positively correlated with both the interest rate and the logged price inflation rate (In the later texts, the price inflation rate is written as the inflation) as follows:

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This proves that the inflation is positively correlated with the investment share of GDP. However, there is a concern that the interest rate and the inflation are correlated each other. If the explanatory variables in one OLS regression are correlated each other, it tends to disturb the OLS analysis result.

So, it suggests to assess the endogeneity of the explanatory variable. By following Keynes' theory and the theory claiming the interest rate is given, the interest rate is assumed to be positively correlated to the inflation. This inference also claims that the Two Stage Least Square (TSLS) regression analysis, instead of the OLS, to regress the investment share of GDP. The first stage regression, which is called the "auxiliary regression", to regress the interest rate, the candidate explanatory variable of the investment share of GDP, on the inflation, the instrument variable of the interest rate, the explanatory variable.

The other reason why the inflation is wanted to be used as an instrument variable and the interest rate is wanted to be used as an instrumented explanatory variable is that this project attempted to explain the whole mechanism explained by the theory and assess if this theory actually proves the real world economic situation. Because it assumes that the interest rate is highly controlled by the inflation. Therefore, the inflation had to be used as an instrument variables so that it cannot be used as one of the explanatory variables.

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These results proved that the inflation is positively correlated with the interest rate as the theories suggest.

The fitted value of the interest rate instrumented by the inflation rate (and Time if necessary) was saved to use for the second stage regression, which is the primary regression of the TSLS analysis.

There are two analyses because "the percentage investment share of GDP times the (natural) log of GDP" and "the (natural) log of the GDP times the percentage investment share of GDP" are assessed a little bit differently. The former one was regressed on the interest rate instrumented by both the inflation rate and the Time meanwhile the latter one was regressed on the interest rate instrumented by the inflation rate only.

Both kinds of regression analyses are based on the non-linear model because there is assumed to be the optimum interest rate affected by the optimum inflation rate which maximise the investment share of GDP. The positive but reasonable rate of the inflation is a indication of the circulation of economic activities running well and the economy is expanding not too fast. However, the positive and high inflation rate decreases the real value of individual economic agents' income, and discourages saving, the source of financial economy, and supply of the investment available (The net present value of the amount of money invested declines over time). In addition, as the (nominal) interest rate is determined by the inflation rate (in order to set the real interest rate (the interest rate minus the inflation)). Therefore, in order to find the optimum inflation rate and then the optimum interest rate (= The intercept + Coeff. x "The inflation" + error) are required to find out!

The regressions below are "the percentage investment share of GDP times the (natural) log of GDP" on the interest rate instrumented by the inflation and the time trend:

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According to the three criteria (denoting the smaller number shown by each criterion implies the better model), the regression above without including the time trend as one of the explanatory variables is a better model than the other with the time trend as one of the explanatory variables. This reason would be because the time trend is already included in the instrument variable of the interest rate.

The other sorts of models with various kinds of formulae, such as the liner model ( I = a + b x R + error) and the cubic formula ( I a + b_1 x R + b_2 R^2 + b_3^3 + error ), are regressed. Nonetheless, the square formula (The second degree formula) came up as the best model to demonstrate the correlation between the investment rate times the GDP. By observing the both models above, both formulae has the global maximum value. Therefore, this result indicates that the optimum interest rate instrumented by the inflation rate exists.

The figure below contains the matrix graph (the top one) showing what the interest rate given by the inflation and the year is, and the other (the bottom one) showing what "the percentage investment share of GDP times the (natural) log of GDP" given by the interest rate instrumented by the inflation and the time trend is:

These graphs indicate the following phenomena:

# The real interest rate (the gab between the interest rate and the inflation rate) tends to be minimised as the year (Time) passes.
(This could be considered because of the global financial liberalisation which has increased the degree of competitiveness of the global financial market. )

# The optimum interest to stimulate the economic activity is between 1.77 and 2.14.

# In 1980 (and possibly before), the high inflation is discouraged the economic activity level more than the low inflation.

# In 1990 and after, the lower inflation discourages the economic activity level far more than the high inflation.

The regression below assessed "the (natural) log of the GDP times the percentage investment share of GDP" with the same method as "the percentage investment share of GDP times the (natural) log of GDP" assessed in the previous regressions.

For "the (natural) log of the GDP times the percentage investment share of GDP", the interest rate is only instrumented by the inflation because this model needed to include the time trend as one of the explanatory variables. This reason is because the dependent variable "the (natural) log of the GDP times the percentage investment share of GDP" is increasing over time so that the regression model had to involve the explanatory variable explaining this factor. It also had to exclude the time trend from the instrument variable of the interest rate in order to avoid including one same variable for two different indicators.

The figure below contains the matrix graph (the top one) showing what the interest rate given by the inflation and the year is, and the other (the bottom one) showing what "the (natural) log of the GDP times the percentage investment share of GDP" given by the time trend (Exogenous) and the interest rate instrumented by the inflation is:

These graphs indicate the following phenomena:

# The optimum inflation rate stimulating the economic activity is 2.48, and the optimum interest rate is 1.5 then.

# Lower the interest rate is implies lower the economic activity level is.

Having observed these results given by the regression analysis (based on the fixed effect model), the sizably low interest rate is less likely to increase the liquidity of the money supply flowing into economy. As Prof. Keynes suggested, the USA and Japan may need to expect the exogenous shock in their economy, such as technological growth and finding a new natural resource and/or a brand new invention, and/or the strong positive planning policy intervention other than the monetary policy.

All in all, the policy makers cannot merely control the interest rate to expect the economic recovery. Hence, the current US and Japanese monetary policy seems to be very unreliable to stimulate the economic recovery.

Gold bubble is less likely because of the high money demand (Low Liquidity)

2011-08-18T11:24:00.000-07:00

There is a concern of the gold bubble. But, it has been predicted that the gold bubble is less likely to happen.

The reason why is that the money demand is still high in global market compared to 1970s, the period that the gold bubble occured. In 1970s, the real value (taking a consideration of the price inflation (The relative depreciation of the money, and the relative appreciation of gold)) of gold became significantly higher than the nominal value of gold. In 2011, the real value is not significantly high, and it is same as or even lower than the nominal value. This is because of the deflation which implies the relative appreciation of money to the value of goods&services.

When the marginal increase of the gold value becomes closer to zero, the investors stop switching converting their saving from the money to golds. This prediction is less likely in the hyper-inflationary situation. This situation occurs due to the "deflation" which takes place when people save rather consume goods&services and/or invest to capital. The demand of money is still high (i.e. the liquidity of money is low) so that the effect of the substitution between the money and gold is low.

The cause of fall in demand of national currencies is the prediction that the value of these national currencies may be depreciated in the near future i.e. the possibility of the hyper-inflation which is the rapid appreciation of gold's real value. However, this is now seen as a speculation. Although the credit rating of some advanced countries went down and there is a concern of collapse of European economy, the USA does not seems to be bankrupt, and the European central bank and government seem to rationally tackle with this crisis. All in all, both the USA and Europe do not seem to be destroyed. The rich investors still save both US-dollar and Euro so that the governments and the central banks will still keep their financial resource well.

There is always a peak in any price rise as long as the financial market is liberalised. There is a limit of investers who are able to convert their wealth into gold. Nobody cannot save their income only by consuming gold. Therefore, when the volume of gold consumed reaches at the limit, the over-speculation of purchasing gold will end.

Rather than the gold bubble and the depreciation of credit rating, fall in the real market in this globe is a bigger problem. Too many investors save their income rather than spend. The gold bubble will end, and the money in the advanced economies will not be significantly depreciated. However, all the income is stuck as saving. They save their income by converting it to the money kept in bank or gold. In order to overcome this global recession, the liquidity of money into the real economy has to increase.

The gold bubble is less likely, but the perpetuation of this world recession is more likely...

BBC Short Video Program about Eurobond which I have been mentioning

2011-08-16T09:53:00.000-07:00

This is the short video programme to watch!

Could eurobonds solve the eurozone economic crisis?
http://www.bbc.co.uk/news/business-14542220

This Eurobond is the key item for the further integration and stabilisation of the Eurozone economy...!

Lower Credit Rating = Higher the Risk Premium = Higher Interest Payment

2011-08-08T08:55:00.000-07:00

The credit rating tends to be determined by the frequency of trade of this national debt. Long (buy) = higher the rate; Short (sell) = lower the rate. This decline in the credit rate means rise in the risk premium so that the interest payment has to go up. The investors (the saving curve) requires higher security on investment to the government (the investment curve): The saving curve shifts left along the investment curve. Therefore, the quantity traded goes down, and then the value of this share goes down...

The European Monetary Union is inevitable, but has to be fundamentally revised

2011-07-23T01:18:00.000-07:00

1. Introduction

This Eurozone crisis has been predicted by many economists. These economists put emphasis on the impact of the money supply volume on the stability of economic environments such as the price inflation rate, the unemployment rate, the gross domestic product (GDP), and the speculative trend on financial market. They argued that, when the monetary policy is unified, the common fiscal policy is also required to be established, all the member countries of this monetary union are supposed to have the financial regulation for all these countries, and the labour mobility needs to be flexible for workers in these member countries to move across these countries in order to stabilise the economic environments. In addition, the econometric analysis of the Eurozone average inflation rate indicated that the European Monetary Union (EMU) is beneficial to majority of the member countries owning to the harmonised inflation rate, but it still requires something to control the different inflation rate of each individual member country. The reason of German refusal of issuing Eurobond is assumed to be because of uncooperative attitudes of Greece. Mr. Trichet, the governor of the European Central Bank (ECB) also suggests that the EMU has to fundamentally change its overall structure before allowing any countries to keep incurring their debt. Overall, the solution of the currently ongoing Eurozone crisis is the fundamental improvement on the EMU fiscal, financial, and labour market structure, and getting rid of the common currency will never be a solution.

2. The problem caused by the monetary policy transformation

The disadvantage of abandoning the national monetary policy (to join the common monetary union) is that this country becomes no longer able to set her own interest rate and the volume of her own money supply. Greece used to be heavily relying on her own unique monetary policy, based on the money supply which was remarkably higher than the average of European countries, in order to finance her government expenditure which could not be sufficiently financed by her unsophisticated fiscal policy. However, after Greece joined the EMU, she could no longer use her high money supply. Greece may rely on the tax revenue burdened on her export revenue such as her tourist industry and the growth of her private sectors stimulated by the economic growth of the entire Eurozone economy. Nonetheless, unless she tightens her fiscal policy, when the entire Eurozone economy falls into recession and/or the demand of Greek tourist industry declines, Greece starts struggling to obtain her public finance resource. This problem has been seen in many Southern European Nations such as Italy, Spain, and Portugal. But, Greece seems to be more problematic than these Southern nations. Spanish government shows a strong commitment on tightening Spanish fiscal policy under the European central government’s induction. Italy still has her strong initiative in European economy thanks to her famous industries such as finance, manufacturing, and tourism. Portugal seems to be similar to Greece, but the quantitative data analysis shown in the next chapter indicates Portuguese suffers much less than Greece.

3. The econometric analysis of the Eurozone average inflation rate

This graph (Qualitative method) above shows the different inflation of the Eurozone countries (IMF, 2011). Majority of the Eurozone countries have a synchronised inflation rate trend from 2002 to 2010. The econometric analysis of the Eurozone average inflation rate, whose results are shown by the following figures, indicated that the price inflation of the individual countries joining the European Monetary Union (EMU) is influenced by the price inflation of the other different EMU countries.

This equation is the inflation rate of all individual Eurozone countries (〖Inflation〗_(i,t)) regressed on the inflation rate in the last year 〖Inflation〗_(i,t-1). As the coefficient of 〖Inflation〗_(i,t-1) is less than 1, this variable is stable enough to converge into a particular point in the long run as follows:

So, this proves that the Eurozone inflation rate is converging into 2% which is what the ECB targets to make! The following regression analysis proves that the GDP grows furthermore when the inflation rate becomes closer to 2%:

This result shows the natural log of the GDP in the Eurozone economy, ln⁡(〖GDP〗_(i,t) ) (Footnote 1.) , is significantly negatively correlated with the inflation rate deviating from 2% which is shown as the absolute number of the inflation rate minus 2, |〖Inf〗_(i,t)-2|. The following auxiliary regression shows both the GDP and the inflation are co-integrated each other:

〖 u〗_(i,t) is the residuals from the previous regression. As the lagged residuals 〖 u〗_(i,t-1) is negatively correlated with change in the residuals 〖∆u〗_(i,t), the variables used in the previous regression, ln⁡(〖GDP〗_(i,t) ) and |〖Inf〗_(i,t)-2|, are stable and co-integrated with the EU inflation rate, which means the movement of these variable affects on the other’s. However, the stability test for Greece and Ireland showed a relatively pessimistic result as follows:

Greek inflation on the inflation of the entire Eurozone countries

This analysis suggests that, , not only the percentage of the entire Eurozone inflation's contingency on Greek inflation rate is 47% in average, which is high,(Amended part) but also change Greek inflation is highly contingent to the entire Eurozone (Footnote 2.). Therefore, it is not only Greece suffers more than the other Eurozone countries and but also Greek economy is highly responsible on the entire Eurozone economy. This aspect may suggest both Greece and the entire Eurozone need to cooperate each other very seriously because Greece should not leave the EMU because her business cycle is already tied up with the EMU.

Irish inflation on the inflation of the entire Eurozone countries

On the other hand, Irish inflation rate is neither stable nor co-integrated with the entire Eurozone one. Therefore, Greece seems to suffer from the volatility of the inflation far more than the other Eurozone members so that she needs either the intervention by the European central government or the fiscal restructuration, or both, to calm down her inflation rate. Unlike Greece, Ireland may be benefitted when she leaves the EMU. Irish business cycle is not correlated with the Eurozone economy. But, if Ireland still wants to keep the membership, the Eurozone eventually needs to have a strong fiscal stimulus enough to enable Irish business cycle to harmonise with the entire Eurozone business cycle.

4. German refusal of participating into the Eurobond programme

The concern of Germany on Greece is that Greek catastrophic crisis will be permanent unless Greece tries to reform her fiscal policy fundamentally and cooperates with the EU central governmental policy rather than her own selfish and irrational nationalism. When a person purchases equity, s/he expects its value to be either stable in the long term or predicted to grow significantly. The value of Greek national debt seems to be neither stable in the long term nor predicted to increase its value in the short term. Even if German government is altruistic enough to sustain Greek public finance by purchasing Greek debt in order to rescue the entire Eurozone, there is a risk for Germany to be drawn into the recession or even to be bankrupt.
The Eurobond programme suggests the Eurozone countries to share both the risk and the benefit of issuing the government debts among the entire Eurozone countries rather than burdening the responsibility on each individual country for incurring the government debt. For example, as shown in the graph below, when Germany experiences the economic growth relatively higher than any other nations whilst France falls into the recession, it needs to tune the aggregate demand of both nations.

As there is no national monetary policy available for both France and Germany, one of the optimum solutions would be increasing the tax revenue of Germany to transfer it to subsidise France. The econometric analysis shown in the previous chapter indicates that French and German economies are highly contingent to each other so that French downturn has to be diverted by German contribution to save Germany herself. This is the idea of sharing the risk and benefit of the national debt and its usage under the collective responsibility among the countries.
Nonetheless, this mechanism may work efficiently and effectively because French fiscal policy does not have a problem like Greek. France and Germany have much more similar labour market situation than Greece. In addition, France and Germany are geographically closer each other than Greece. So, the labour mobility is much more flexible between France and Germany than between Greece and them. Furthermore, France and Germany balance their budget without relying on the excess money supply unlike Greece. If this case scenario were Greek instead of France, German tax revenue transfer to subsidise Greece is ineffective and inefficient.
The intervention from the European central government into Greek fiscal policy under the strict guideline of the central government is also emerged. Greece is still resisting against this intervention due to the sentimental irrational populist nationalism. The European central government regards that, in order to make this money transfer to Greece more effective and efficient, Greek fiscal reform lead by the further privatisation of the entire Greek economy are inevitably required. Greek labour market is rigid because of Greek economy’s reliance on the huge public sector, which disrupts the flexibility of the labour mobility. On the top of the inflexible labour mobility, Greek public sectors are not rational enough to balance their budget. They are not used to the market competition and the thread of bankruptcy because they are always protected by the nation unlike the private sectors. By contrast, the private sectors are much more used to balancing their budget under the market competition. As long as Greek public sectors struggle to rationalise their budget to be balanced by their own effort, the enforced privatisation seems to be only the antidote of the fiscal imbalance.
All in all, the responsibility of Greek fiscal policy should be burdened more on European central government to discourage Greek irrational populist nationalism which is notoriously uncooperative to solve this currently ongoing problem for both Greece herself and the entire Eurozone economy. In order to discourage this pathetic nationalism, the privatisation to minimise Greek national government authority can be a key solution before substituting the power of Greek nationalism with the European economic cooperation.

5. The ECB’s point of view and warning from Mr. Trichet

Focusing on the ECB’s point of view on the current Eurozone financial havoc, the ECB executives are suffering from the dilemma between putting priority on saving the Eurozone economy and focusing on calming the inflation by suggesting the fiscal policy of all Eurozone countries to be tightened. In particular, Mr. Trichet, the governor of the ECB, always rejects the optimism on the Eurobond programme without fundamentally reconstructing the fiscal structure in the entire Eurozone. Mr. Trichet has been always suspicious about the stability of the Eurozone economy since the ECB was established. His suspicion is related to the fiscal problem mentioned in the previous chapter.
The ECB has been purchasing a large volume of the national debt of the Eurozone countries by its quantitative easing. In order to keep the value of these bonds to invest to rescue these governments, the ECB has. The ECB cannot survive without an economic activity of these nations so that the ECB needs to save the national governments of the Eurozone. Otherwise, the value of Euro becomes zero so that the ECB itself disappears. However, the expected result still cannot be seen, and the aggregate government bonds incurred has never stopped expanding. This mechanism still enables the Euro exist, but it depreciates the value of Euro further. This phenomenon causes the inflation to hike up, and then the nominal interest rate eventually needs to rise. Overall, rescuing the Eurozone countries damages the private sectors and individual citizens by a high interest rate, and it creates further government deficit which requires the further ECB’s quantitative easing, which again induces a further inflation. Mr. Trichet has already warned this spiral would occur and urged to divert from it since the beginning of the Eurozone crisis (Footnote 3.). Thus, he rejects all the optimism of perpetuating this situation.
The ECB also struggles with negotiating with the private sectors. Although the previous chapter stated the positive aspect of the private sectors in terms of the fiscal policy, the private sectors cause problem in the monetary policy set by the ECB (Footnote 4.). The private sectors are willing to raise their profit and the wage for their executives, and detest the high interest rate. These characteristics of the private sectors perpetuate the inflation which discourages an economic growth of both countries and private sectors themselves in the long term. Generally speaking, the private sectors are uncooperative to the European economic stabilisation. Although the stabilised European economy which the ECB expects to establish benefits to the private sectors in the long term, these private sectors are less interested in it than the ECB.
This aspect infers a danger for European economy which is now also fund by the private sectors. This could be the reason why Mr. Trichet is modest about the private sector contribution to rescuing the Eurozone national economies .

6. Conclusion
In conclusion, there is no optimistic prospect on this current Eurozone economic situation. In order to solve these structural instabilities, the Eurozone may need a fundamental radical revolutionary act on altering both economic and political entire structure. But, they cannot stop the European economic integration because the almost all Eurozone economies are highly correlated with each other as proven by the econometric analysis. It seriously needs an IMF of Europe, which the ECB is trying to act like. The ECB should have a much stronger authority to instruct the fiscal policy of national governments in the Eurozone as same as the IMF does to the national governments in the globe. In addition, if the priority is saving the European economy, the heavy reliance on the private sectors contribution is very risky. Hence, the ECB policy based on Trichetian Monetarism, which is tough against the irrational egos of both the national government fiscal policy and the private sectors’ short-termism, seems to be only the reliable tool, and the economic agents had better listen to it.

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Footnotes:

1. When a variable is positively skewed, it needs to be logged or transformed into the root (E.g. square root and cube root) in order to offer a reliable, unbiased, and consistent statistical analysis.

2.

3. Referring to “The Wall Street Journal”: JANUARY 8, 2011, Trichet Urges Budget-Cutting http://online.wsj.com/article/SB10001424052748704739504576067352757709020.html?mod=WSJEUROPE_hpp_LEFTTopWhatNews

4. Referring to “The Wall Street Journal”: December 20, 2010, 8:43 AM ET, Oh, No! Germany More Competitive
http://blogs.wsj.com/brussels/2010/12/20/oh-no-germany-more-competitive/

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My Additional Comment added on 4th of August 2011:

Well, as I mentioned in my essay, it depends on the hamonisation of the business cycles in these candidate nations (I referred to the price inflation rate as an indicator of the business cycle). When the business cycle is harmonised (Synchronised), the monetary union becomes necessary or inevitable, such as the Greek and the other Eurozone countries' case. Otherwise, such as Irish case, it should not join the monetary union or it has to have a great intervention to artificially harmonise the cycles.

Speaking of the possibility of another monetary uninon of nations in this globe, this book on the following link is the good introductory reference:
http://www.amazon.com/Economics-Monetary-Union-Paul-Grauwe/dp/0199563233/ref=sr_1_1?ie=UTF8&qid=1312165596&sr=8-1

Some African nations might be benefited because they trade each other often, and their economy is not self-sustainable i.e. needs to be corroborated each other. But, they indeed need to have a common fiscal policy to modernise and tighten the fiscal policy of all these nations.

South American nations should not have the monetary union yet. These individual South American countries are too big by means of the land mass relative to their population density (I.e. The cost of the inter-country trade inside South America is higher than the benefit from it). Furthermore, these countries do not trade each other often compared to the other blocks of countries in this world such as Europe, North America, Africa, and Asia (According to the statistics shown in Economics of Monetary Union (Paul De Grauwe)).

The trade frequency of among Asian nations is the highest of all the international trade made in this world. So, as Lee Kuan Yew, the first Singaporean prime minister, said forming Asian trade community could benefit Asian nations. However, other than economic factors, the political factors exist as the obstacles which disrupt forming this trade community.

Only the person concerning the EMU whom I can truely respect and trust is Mr. Trichet and his ECB. I claim that not only the EMU national fiscal policies but also all the private enterprises in the Eurozone economy should be instructed by the ECB based on Trichetian Monetarism...!

The International Monetary Fund (IMF) is necessary and its necessity is inevitable

2011-06-18T22:31:00.000-07:00

* This article refers to The Wall Street Journal
JUNE 17, 2011, 3:53 P.M. ET
IMF Cuts Growth Forecast for Global Economy .

I understand how angry the IMF is due to the bad discipline of the EU fiscal policy and the retarded attitude of all national governments in this globe...! I believe the IMF should intervene into both monetary and fiscal policies of all over the world because the world economy has already become globalised. Economic regions in all over the world is now too contingent to avoid focusing on the global economic political censorship by the global financial institute...!

I assume that the IMF "wanted to expect" the USA and the EU to install the right policy as the IMF suggested. I guess, this does not mean the IMF miss forecast; the IMF crackdowned to say these economies will be endangered because they did not listen to what the IMF said! This is the way, the IMF always change the prediction. I have recognised that the IMF economic prediction is rather subjective than objective. But, I do not say it is a bad thing; it is a strong indicator of what the IMF judges. I have more faith in the IMF than any national sovereign any way...

Do you know who said we needed the IMF? John Maynard Keynes, and I support his idea! So, I am not a fundamental monetarist although the national sovereignty in all over the world should be abandoned. This is not due to the political ideological issue (J. M. Keynes was actually an economic pragmatist), it is the "accountability" and "responsibility" issue...! It is a "natural evolution" of economy! As economy becomes globalised and contingent each other, the market (Nature! Geometrical fact!!) needs a global mediator. I am not for a world government, but I am for a world financial liberalisation!!

Difference between 1929 and 1990s, and 2000s-10s

2011-06-09T16:22:00.000-07:00

Yeh, the scale of banks' bankruptcy was much smaller than the current banks' bankruptcy, not so many Friedmanites realised. In 1929, Friedman's claim of temporary money supply for rescuing these private banks may have worked because the bankruptcy occurred because of the fear of people assuming banks could bankrupt.

By contrast, 1990s and 2000s are the entirely different problem!

The financial crisis in 1990s was based on the immaturity of Asian financial institutional policy. I agreed with Stiglitz that these Asian financial institutions were not mature enough to let run independently. He claimed that the IMF should have had a great role to induct them, and more the foreign direct investment from the advanced nations should be injected into.

The ongoing financial crisis is tremendously much more problematic than these previous world financial crises! This problem also involves the "financial accounting" which allows institutions to involve the aggregate market value of the assets investment they have purchased which is their potential gain from asset investments (This is called "Unrealised Profit" in the pure cost accounting because it cannot be simply shown in the balance sheet based on the "Cost Total System" which is based on the total sales revenue minus the total cost).

Before the late 1990s, the financial law in majority of nations did not involve the aggregate market value of their shares purchased. However, from the late 1990s and early 2000s, the financial law in all the advanced nations started allowing involving any potential gain from asset investment. This change in the financial law dramatically changed the attitude of financial institutions in the advanced nations. All these financial institutions started to purchase a lot of shares. This resulted in that, although the profit comes from the total sales revenue subtracted from the total cost is smaller or even loss, the book involving the potential profit (the current value of share minus the value of share when it was purchased) shows the profit is huge.

The opposite case scenario of this financial accounting is Chinese government. Nowadays, Chinese profit based on the sales revenue minus the total cost is higher than the profit based on the aggregate market value because the value of all the foreign currency and all the national debts of the advanced nations, which Chinese government has purchased in the past to depreciate Chinese currency, become depreciated dramatically.

Therefore, unlike in 1929, the central bank could not predict the adequate volume of money supply it should have poured into the market to rescue these banks involved in this activity to increase the "aggregate market value" of their total asset investment. Some of the shares these financial institutions are foreign, different industries, and toxic. Therefore, although I would support Friedmanite bank rescue program in 1929, I am deeply sceptical about his theory applied in the current crisis. Many socialists tend to blame capitalism. But, I would rather blame the national authorities who regulate the financial accounting law. This problem is way beyond the central banks' responsibility and accountability on their loss.

If it were based on the accounting based on the revenue coming from the pure monetary saving and investment, yes Friedmanite policy should have applied. However, this problem highly involves the mal-management, which Friedman should have said there needed a strict crackdown on these financial institutions.

As a matter of fact, one of my lecturer in my MSc in Strathclyde uni was Friedmanite, and he highly criticised the current global financial market situation. He strongly disagrees with the Euro, the sub-prime loans (He said that such a private sector business involving the risk of bankruptcy should not have taken place), and the over-expansion of the current banking system.

Furthermore, the current financial recapitalisation was done by the fiscal policy rather than the monetary policy which Friedman insisted to use.
I know Friedman would have supported rescuing banks by the excess money supply, but some guys would say that it was Friedmanite policy to rescue these banks having involved in race of increasing their aggregate market value. However, if there are a violation of equity, such as the fiscal policy to rescue these mal-managed institutions by using the innocent tax payers' money, and the problem is beyond the accountability of central bank such as the ongoing financial crisis, the responsibility of monetary policy is very limited, Friedman would have said if he follows his original role.

Speaking of Hayek, I am more likely to detest Hayekian than follow. Hayekian theory strongly insists the importance of "tradition" and "traditional moral guide line" (I really despise them!) which Hayek defined as a key to stabilise economic and social order. In addition, Hayek is morea political philosopher than an economist, I would say, meanwhile Friedman is a pure mathematical economist. Hayekian ethics follows the school of Natural Law as same as Edmund Burke. This is why Hayek humiliated Friedman as an anarchist.

This is why Hayekian theory can be also applied to European Social Democracy seen in Germany and Scandinavian nations. Hayek did not particularly support free market economy nor fundamental reconstruction of economic structure unlike Friedmanite. Furthermore, the huge difference between Hayek and Friedman is that Hayek was deeply sceptical about Macroeconomics whilst Friedman put emphasis on Macroeconomics. As a matter of fact, North Western European economic policy is highly microeconomics, and hardly regards of macroeconomics. Hayek would be happy with the continental European economic policy, which is yet Socialistic and has installed the common currency, whereas Friedman would be upset about and against the current continental European economic structure...!

Recommendation of Moral Relativism

2011-06-09T02:28:00.000-07:00

I am thinking about moral. As John Locke said Christianity is worth off to exist because it stated the importance of talking about what is the fundamental moral principle and showed the model of a visible sovereign of moral codes even though we do not have to agree with what Christianity says.

This is a benefit of having monotheism such as Judaism, Christianity, Islam, and Atheism (including Confucianism, Western Modern Secularism, and Nihilism). Therefore, although I respect Jesus Christ and believe in God (in a Panentheist way), I do not follow Christian (Christendom) moral principles. I only respect St. John, the baptist, Christ, Mary Magdalene, and St. John, the evangelist, and despise the rest of the saints!

The reason why I detest Marxism is that I can feel the same servileness of these Christian saints I despise from Marxism! This indicates that both Primitive Christianity and Marxism are based on the moral non-naturalism. This is "Ressentiment" making individuals to believe there should be an alternative world which these servile miserable individuals can defeat those who looked them down.

We must realise that this is the only society we live and we can live ever as the outcome of our world we are living in is the mere reflection of our naturality of human-being!

Therefore, there is no such a thing like universal morality all human beings must follow! Moral is relative; the definition of morality varies across time, place, and occasion. So, none has a right to condemn the different morality in any community we do not inhabit! Only the greatest sum of utility and the smallest sum of pain, the power of conqueror, and each individuals' ego-centric decision prevail to define the right morality! Therefore, it is wrong to have one universal absolute moral principle (i.e. the monopoly of moral entrepreneurship)!

In order to realise this fundamental principle of our world, we should at least once study and/or participate into a monotheism to know what is moral, and then become sceptical about it to contradict it.

Anything exists in our world is natural!
Anything we crave for is natural!
We should not keep our eyes and ears off from them!!
Those who voluntary become blind and deaf from this fact and those who blame admitting this fact shall be depreciated!!
Hence, I shall keep speaking of it as an enlightened individual...!

Europe in crisis...!

2011-06-03T15:19:00.000-07:00

* The picture above is from Daily Telegraphy Euro crisis is far from over – what the experts are saying.

* This article refers to The Wall Street Journal JUNE 3, 2011, 5:52 P.M. ET Greece Set to Get Next Aid Installment.

Definitely a strict crackdown on Greek treasury, and a fundamental Eurozone wide reform are required ASAP!!

No more liquidity (buying the bonds by printing excess amount money) 'cos it causes a further interest rate hike up* which discourages the private sectors! Greek economy unfortunately won't be allowed to leave the Europzone 'cos my regression analysis showed Greece economy is highly co integrated with the entire Eurozone economy!

(* Usually when the excess money supply goes into the market, the interest rate often falls if the economy has been in recession which is caused by lack of the aggregate demand which induces the excess supply. The US and Japanese case of the excess money supply caused the lower interest rate. However, European economic problem is not caused by the demand&supply fact; it is based on the "structural" problem. Therefore, it is more likely to cause the hyper-inflation, i.e. need of high interest rate for borrowing, instead of the liquidity-trap, the deflation.)

Greek economy is actually highly reliant on the Eurozone economy... Greek system should be more intervened by the European central government! The silly idea of the Eurozone is that it still allows each member to incur the national debt under the common monetary policy...! This is the same silliness as though allowing each state in the USA to hold its own public debt without complete separation of the states and the federation!

When I read the Wall Street Journal on 10th of May, this American news paper claimed that European economy will be drawn into the insoluble fiscal chaos due to her extremely tolerant attitude toward the irrational European populism... This fiscal chaos won't be overcome unless a strong (even oppressive) enforcement on fixing this fiscal imbalance and the irrational populist influence on the fiscal structure...

... I must say that the Europe suffers from the tyranny of majority as same as Japan! Therefore, any rational movement hardly takes place...

But, unlike Japan, the integrated European economy has a full of potential! An affluent human capital development, variety of factors of productions from different European countries, and the strong capitalist ethics which has been developed over centuries!

"Europe needs an iron-lady" as same as Britain had. But, the problem is that this scale of the economic failure is bigger than what Britain suffered from in the past. Therefore, the figure which is larger than British iron-lady...! But, the tyranny of majority won't accept such the "to be cruel to be kind" method as this majority is already spoiled by the illusion of their Utopian dream.

This is the same as Japanese tyranny of majority expelled Mr. Kakuei Tanaka, the admirable Japan's former prime minister, who thought of people better than what people thought. Mr. Tanaka was the person who could make Japan truly sovereign and enlighten Japanese people to be evolved from poppets to independent minded citizens! The similar event is now taking place in the Europe... If the tyranny of majority is strong enough to oppress the talent, it fails into the problem seen in both Japan and Europe!!

... "In order to defeat a monster, it needs the monster stronger than this monster...!". Hence, the tyranny may be only able to be defeated by another tyranny which is stronger than the current tyranny...............

Sonderbericht: The radiation exposure forecast in the archipelago of Japan

2011-06-01T19:34:00.000-07:00

Shows the weather forecast of the radiation exposure in the archipelago of Japan.

Milton Friedman, Income Distribution, Matter of live, and Nihilism

2011-05-29T16:55:00.000-07:00

Professor Milton Friedman, the counter-revolutionary economist! He denouced socialist economy as an oppressive totalitarianism. Although I disagree with some parts of his macroeconomic theory, I strongly support his political point of view as a laissez-faire capitalist theorist!!

He supports the idea that Adam Smith told that "The poorest in a rich country is certainly better-off than the rishest in a poor country because the former has a much better access to the wealth and the culture than the latter. Therefore, the relative income inequality is often irrelevant. The more significant inequality is the "capability" such as avoiding envy, competence, opportunity, and the business cycle.

The deprived individuals themselves are sometimes responsible for their own situation. If it is not merely due to their own responsibility, the family they have been brought up are the fundamental problem! Who want to support someone not-known or hated without any reward? I do not want a government which enforces us to sacrifice our precious property to save those whom we are not associated with and whom we even hate so much!! If I were going to be such a deprived situation, I would rather choose to die without any pseudo moralistic hippocratic sympathy and any antipathy for my misery...! I would be rather happy to become alone to live myself than be made survived by those whom I hate to be enforced to live...!

...... The life is not the matter of live, it is the matter of how to die!!!

The way anti-Friedmanites criticise Financial Liberalism as the cause of the last Asian financial crisis in 90s is too old!

Of course, Stiglitz said these Asian economies did not leave the enough reserves. This is because they had to rely on the revenue coming from the excessive amount of financial investment in order to sustain their economic growth. At that time, this caused the bubble burst.

However, this crisis was caused not only because of the Financial Liberalisation, but also the lack of foreign direct investment (FDI) due to the fact that the world was not enough globalised then.

Nowadays, in developmend countries, the opposite case scenario from the 90s is happening. They always "increase" the reserve, instead of reducing the reserve!

In the current globalised world, these developing countries do not need to reduce their money reserve because they can crave the FDI from abroad. Therefore, unlike the 90s, they do not have to reduce the reserve any more, and keep their Financial Liberalisation goes by remaining the reserve ration sufficiently high.

Although what Stiglitz said was right as the contemporary time period, Friedmanite counter-revolution brought a big benefit to the global financial market! As the world is more globalised, there are more FDI opportunities for these developing countries! Therefore, they no longer need to make their financial market repressed by the state's controll to stimulate their economy by creating the inflation as the cost of this stimulus!!

Financial Liberalisation encouraged raising the interest high enough to calm the inflation! Friedman is great to make us remember how costly inflation is for the lower income people!! The financially repressed economy conducted by state public sectors always causes the inflation unless they artificially repress the aggregate demand such as the USSR did!

In the past, there are only two choises, the financially repressed economy with an intense state intervention with a high inflation rate and the financial liberalisaion with a more flexible private sector based economy with the interest rate flexibly adjusted to the inflation rate with a risk of declining the reserve ratio.

Of course, the latter choise is far better than the former because it gives the freedom of choise (better than a lof of employment artifically created by the state) and the anti-inflation management (Again, the inflation is very costly to the majority of people including both the middle income and the lower income) . In addition, nowadays, they no longer need to reduce the reserve ratio (Actually increasing by financial liberalisation nowadays!) because they can seek the FDI to keep the sustainable reserve ratio! Therefore, although what Stiglitz said was correct at the contemporary time period, but Friedmanite movement was correct as well in order to expand another possibility of the global financial market evolution!!

Viva! The Cold War is over thanks to our liberal capitalists' victory!

P.S. I despise Edmund Burke so much! That's why I enjoyed reading Thomas Paine who criticised British cultural conservativism!! Although Thatcherites regard highly of Burkean and Hayekian, I disagree with both Burkean and Hayekian perspectives! I am more Friedmanite (without his hypowered money hypothesis) Thatcherite! I strongly put emphasis on the "fact" that economy is the geometry; not the ideology! I am not sure whether or not I shall be called an extremist, but I am certainly proud of myself as a Market Dogmatist! I really hope that economic policy becomes totally independent (not only monetary policy but also fiscal policy and supply-side regulation) from ideologistic politics...! Both Nationalistic Euro-Sceptics and Populist Europhiles way too much put their ultra idealistic policies into economic policy so that it disturbs the economy by diverging from the optimum geometric condition!!

Good characteristic of the United States of America (USA) as an experiment of the liberalist nation!

2011-05-27T15:11:00.000-07:00

Unlike Europe and Japan, the USA does not have a strong constraint of the "tradition" and "class"! Although the constitution and Christianity are sometimes regarded as the "tradition" (This is the US characteristic I detest), the USA regards highly of "meritocracy" without taking family, educational, and any social class background into consideration (without using a big government intervention: It is based on people's general will!!), flexibility in industries (E.g. accounting, labour mobility, etc), and pluralism (E.g, More people are integrated into the main stream culture than those in Europe).

Europe is more rational and secular when they establish a legal system, argue about moral and ethics, and revise their civilisation (Actually, the US people tend to think their nation is a utopia regardless of the political ideology; conservative Christian Republican and progressive secular Democrat.

However, Europe suffers from the negative effects of Welfare-state, whose socialism is tolerated under the interest of European nobles, people's stereotypical perception of social backgrounds, and inflexible ways of industrial management.

I know both Europe and the USA are much better than Japan which suffers from the disadvantages whose personality is the combination of the negative and unproductive characteristics of both the USA and Europe. Japan and Japanese conscientious people (I've never expect anything like that for stupid insane Japanese mobs!) have got to learn from the comparative study of Europe and the USA...!

One of the greatest aspects of both North and South America is that, unlike Europe and Asia, they have never had to be worried about the threat of losing land and the state of war among endogenous people. (The Civil War was provoked by neither the threat of losing land nor class war (Some historians say it's because of the class war, but it is not the main cause)). Therefore, neither national socialism such as Fascism and Natizm nor proletarian dictatorship (Cuban revolution was based on the interest of the entire Cuban people, not the proletarians against the endogenous bourgeoisie) has never come into the power!

Furthermore, I admire the USA as the father of Libertarianism! It showed the possibility of anti-traditionalism and laissez-faire economy work well to establish one strong and remarkable civilisation! Unlike the experiment of state-socialism such as the USSR, the experiment of liberal (by means of European definition) economism worked!

Nonetheless, I am only sad that the last US Republican party regime distorted the original identity of the USA. It undermined the liberalist establishment... I am happy to see that the current US democratic party regime under Mr. Obama's conduct seems to replace the distorted establishment with the original idea of the US establishment of liberal integration among people and the frontier spirit, which have been once seen in J.F. Kennedy's regime...!

Ref. (Written in Japanese): http://hansenjuku.cocolog-nifty.com/blog/2010/07/post-b06b.html

Political Spectrum (Political Compass) Civilisation basis

2011-05-04T08:37:00.000-07:00

Political Spectrum (Political Compass) Civilisation base:

* This spectrum refers to the following resources:
- The Political Compass dot org
- Inglehart-Welzel Cultural Map of the World
- The Pournelle Political Axes
- Redefining the Political Spectrum - The Rational Spectrum

- Economic Political Spectrum Part 1: Big/Small Government no longer matters
- Economic Political Spectrum Part 2: Rationality and Proactivism
- Economic Political Spectrum Part 3: Not the parties, it is matter of civilisations

World Economic Forecast in 21st century and after

2011-04-16T13:59:00.000-07:00

The map above explains the volume of the future economic growth in different regions in the world. The predicted volume of economic growth shown in this map is measured by the variables shown in as follows:

A1. The overall market potential indices (Click the link to read what this word means).

A2. Geographic advantages such as the short great circle distance from economically active regions, capability to have a good dock, being neither landlocked nor island nation (not significantly affecting developed nations and Asian emerging nations, but significantly affecting majority of least developed economies).

A3. The growth in productive population growth relative to the unproductive population growth (reasonable birth control, affordability of general education and parental love for children, and adjusted population growth to economic growth and land-capability).

A4. The human capital development (E.g. Education, Individual Liberty and Right, and Rationality). This affects the speed of learning newly introduced technologies in the world, adapting them to produce and sell newly introduced goods and services created, and ability to invent an original new technology themselves by referring to existing technologies.

A5. The natural resource reserves, which create a trade surplus. The impact of benefit from it is bigger in emerging economies and least developed economies than developed economies, but some developed economies are able to develop further more than the other developed economies due to the extra surplus by extracting natural resources.

A6. The political and social stability in both the present and the future time period.

On the top of these variables applying to scaling the predicted economic growth of all kinds of economies, there are the other variables which only scale a particular kind of economies. There are two main different characteristics of economic regions introduced in this essay, the Northern economies and the Southern economies.

The Northern economies, shown in Blue, are those whose economic growth is mainly stimulated by the variables shown in as follows:

N1. European rationalism and strong egalitarianism (except for Russia) which influence the level of intelligence per head,

N2. Newly introduced trade integration such as the Eurozone economy which benefits to the Eastern European nations,

N3. Philosophy influenced by ancient Greco-Roman philosophies and Christianity which are ones of the remarkable variables implanting the spirit of capitalism, such as contract, fairness, honesty, ideality, individuality, trust, and unity, into ordinary individual citizens' mind,

N4. Various scientific innovations. Majority of them are innovated in the Western civilisations including the former USSR block excluding Islamic areas. The currently most notably advancing Western civilisations are Germanic and Scandinavian nations.

N5. Not suffering from negative assets of the past imperial period. Not only Spain, Portugal, England (So, exclude the other regions in the United Kingdom), and France, but also Japan (Not only before and during the world war 2 but also the post war period economic imperialism) and the United States of America (USA). These three following things are the negative side effects of their past imperialism haunting on them:

n5.1 The economic sunk costs caused by a rapid decline in their holding power,
n5.2 Inattentive and negligence due to their arrogance of the old glory,
n5.3 Mobocracy of the mobs spoiled by a habit of extracting their wealth from the wealth accumulated in the past (The over expansion of economy causes a severe downturn in the future. The bigger nations are less likely to avoid this situation than the smaller nations)

* The Soviet communist regime can also be seen as another form of imperialism. But, this imperialism had never brought any significant prosperity enough to leave these three pathologies. In another word, the communist imperialism has failed to be a prosperous imperialism so that it was an unsuccessful imperialism.

The Southern economies, shown in Red, are those whose economic growth is encouraged by the variables shown in as follows:

S1. The strong politically and socially cohesive policy, which is remarkable to support a strong but sustainable economic growth by uniting all different cultural identities and economic and social backgrounds of citizens by selecting one charismatic political authority as the opinion leader. A strong but sustainable economic growth resulted by this policy has been seen in the Eastern world for a long time and is recently introduced in many South American and some African nations.

s1.1 Some nations use the development dictatorship based on rational-secularism which is most notably seen traditionally in Asia, and recently in Latin America and some African nations;
s1.2 The other nations use the common religious value as a symbol of unification such as theocracy in almost all Middle-Eastern nations and majority of African nations.

S2. Stable urbanisation process. This variable is related to the variable A3 (The growth in productive population growth) the variable A4 (The human capital development), and the variable A6 (The political and social stability). Nowadays, thanks to the globalisation encouraged by the rapid information technological growth, people in emerging and least developed economies have become able to copy the newly introduced knowledge and technologies, and use them to produce better goods and services. But, in order to grow their economy by this process, they need to fulfil these three following conditions:

s2.1 They need to improve and develop their education system to become able to copy the newly introduced technologies.
s2.2 They need a huge population in either their homeland or neighbourhood countries, or both, to sell these goods and services faster to grow their business.
s2.3 In order to accomplish these two objectives, the political and social stability is significantly required.

All in all, these nations require an urbanisation of their economy, which means increasing population density, which enables people to exchange information and physical resources each other fast. The urbanisation requires a huge population already existing. Therefore, an already highly populated nations tend to have an advantage.

Furthermore, the urbanisation lowers the cost of developing human capital because the speed of exchanging knowlegde and technology becomes faster as the place become urbanised. The cost of developing human capital used to be a big obstacle for least developing nations when there was a huge barrier of exchaning the information. The Cold War used to block flexible information flows in the globe, and the ongoing political unrest disrupted people in these nations united. Nonetheless, both The end of the Cold War and the rapid information technological growth since then brought a globally free exchange of information flow. In addition, the knowledge and the wisdom gained from this flexible information flow have enabled people there to become harmonised with themselves. This aspect of the globalisation has made the harmonisation and the urbanisation tremendously easier than the past

Unlike the North economies where people have been already unified under the strong common identity and the stable political and social environment, the Southern economies tend to lack of the unification seen in the Western economies. In order to concentrate people together into one area, the political stability and the community harmonisation are highly required. In particular, in these Southern economies, the conflict between different identities tends to be an obstacle of their urbanisation process. Therefore, the variable A6 (The political and social stability) is a key element to achieve their urbanisation.

S3. The power to monopolise the geographic advantages. This variable is related to the variable A2 (Geographic advantages) and the variable A3 (The growth in productive population growth). The typical example is Singapore before Malaysia built a large scale industrial port. At this time, Singapore was only the country in the strait of Malacca so that Singapore could monopolise the revenue coming from the logistic industries, the processing industries, the financial industries (at this time, it needed to rely on geographic advantage far more than nowadays) and the tourist industries. However, since Malaysia built a new large scale industrial port in the own land, the market in the strait of Malacca has become oligopoly so that Singapore has become no longer able to exploit the monopolistic power there.

In already developed nations (In 20th century) such as Western Europe (some Central and Eastern European nations became developed in 21st century though), North America, Australia, New Zealand, and Japan did not hugely have to rely on the geographic advantage because these developed nations already had a self-sufficient domestic economy. By contrast, nations of both emerging economy and least developed economy need to rely on the revenue come from the international trade before they are fully developed enough to have a reasonably self-sufficient domestic economy.

The overal summery of these economic predictions is that all economies depends on the Market Potential (i.e. Geographic advantages, the high demand volume of exports from these economies, and the high human capital development ration) without a doubt. The Northern economies is strongly affected by whether or not past imperial experience haunts, and has better potential if they are located North much as possible (More North tends to be more human capital). The Southern economic growth is significantly correlated with their population more than any variable, and the some geographic advantages such as having a good location to build a good large scale industrial port and having natural resource reserves.

Brief Mechanism of the Bamboo Capitalist Financial Market shown by graph and formula

2011-04-13T12:58:00.000-07:00

* Click the picture above to enlarge.

This essay refers to the article in The Economist, March 12th-18th 2011 edition. The analysis shown in this essay indicates the assumption of how the bamboo capitalist economy offers such amount of the investment. The graph and the formula shown above simulate how this financial system invests to the excessive number of enterpreneurs enough to boost the economy fast as much as it is called the bamboo capitalist economy. But, the bamboo capitalism infers the fragility of this economy. Whilst this economy is fast to grow as bamboo, it is fragile as bamboo.

The diagram and the formula explains how the bamboo capitalist economy works. According to The Economist referred in this essay explains that the fuel of this bamboo capitalism is based on the money flow from the underground economy.

As the legal financial institutes licensed by Chinese government is so risk averse that they can only offer the investment for those who are able to pay the interest rate, r_L,B which is way above the market equilibrium rate where the true investment curve ( I ) and the true supply curve ( S ) intersect each other. Therefore, the quantity of money flow by the legal financial sectors is limited at the point Q_L.

This is the reason why the frustrated demand of investment exists in this financial market. Therefore, the underground economy started to offer some investment into those who are frustrated by the lack of financial investment source. The problem concerning this market is that the financial institutions in any underground economy are notoriously famous for their risk loving attitude of financial investment (It has a tendency to lend money whose quantity is higher than than the equilibrium point). Therefore, the investment offered by these underground financial institutions often induces an excess economic growth which results in a bad side effect of the severe bubble burst.

This underground economy of course needs to gain some resource for investment. This essay assumes that the underground financial institutions borrow the cash from the legal market at the interest rate, r_L,B . But, they offer the very low interest, r_U,B,0 , to the clients for them at the biggining.

The interest rate, r_U,B,0 is on the point where the pseudo saving curve S' and the true investment curve I intersect each other. The clients of this underground financial institutes are tricked to assume the interest rate, r_U,B,0 is determined at the equilibrium point of the intersect of the saving and investment.

Without a doubt, they lose an awful lot of money at the point where the interest rate for the underground financial market is set at r_U,B,0. So, they need to raise their interest rate higher as the time passes in order to cover the cost incurred at the initial period t=0 over the periods. Although they promised to charge only at r_U,B,0 , they unexplicitly increase their interest rate at the next time period at r_U,B,t, which is significantly higher than r_U,B,0, without any former contract between them and their clients made in advance! This is the reason why the pseudo investment curve I' is always higher than the interest rate in the legal financial market r_L,B . (This is why the equilibrium point where the pseudo investment curve I' and the pseudo saving curve S' intersect each other is at the interest rate r_L,B = r_U,B,τ where the taking subtructing the cost for the underground financial institutions is zero, i.e. break even.) The pseudo investment curve I' denotes the investment amount under the given interest rate these underground financial institutions actually want to charge their clients.

Their clients are forced to pay extraordinally higher than they initially agreed to pay in order to cover the cost burdened on these underground financial institutions (shown in the pink coloured square) and to enable these underground financial institutions to make some profit (shown in the purple coloured square).

The number of time periods the contract between the underground financial institutions and their clients taken is represented as τ in the graph and the formula. They take the τ time periods to cover the cost incurred and to make their profit from lending money. The formula π_U,τ shown in the white sheet above denotes their total profit gained at the time τ .

The inevitable fact is that there are always the clients of these underground financial institutions who become unable to keep paying the interest rate unexplicitly bid up all the sudden at the time period t = τ after the initial time period t = 0 . Therefore, it is often Q_U,B,t < Q_U,B,0 . Then, these underground financial institutions need to confiscate their clients' collateral when these clients become unable to pay any more interest rate given at the time period in order to compensate for the loss, the cost incurred to lend money to these clients, for these financial institutes.

During the economic boom, the risk that the quantity of the total money flow Q_U,B,t declines is low. The reason is that, even though the underground financial institutions push their interest rate significantly up unexplicitly, the business performance of these clients may become stronger enough to increase their revenue to cover the increased interest rate after they had an opportunity to open up their business by the investment from the underground financial institution which the risk averse legal financial mark did not offer. Therefore, in the economic boom, both the underground financial institutions and the clients win, i.e. neither loses.

By contrast, when the economic bubble burst suddenly takes place, these clients having used these underground financial institutions lose their opportunity of the business expansion enabling them to pay the unexplicitly increased interest rate off. Then, there are a lot of the clients who lose the capability to pay the interest rate to their lender. At the same time, these clients are confiscated to give their collateral to their lenders to compensate for their incapacity of paying the interest rate given at the time period. All in all, the clients lose, and the lenders may win if they can take enough collateral to cover their loss of the interest rate gain.

This aspect is the nature of risk loving financial industries who are willing to lend more than the amount at the equilibrium point. They take the risk to obtain the potential gain from the risky clients. During the economic boom, the probability to succeed in gaining from the risky clients is high. However, during the economic downturn, the probability becomes tremendously low. While Chinese economy is still on the boom, the probability is kept reasonably high. Nonetheless, when Chinese economic boom becomes chilled out, there will be a lot of industries and individual entrepreneurs lose their collateral (Their entire propaty and/or possibly their life). The economic boom in any part of the world tends to be stimulated by the irrational exuberance (The fashion). Chinese economy could have been stimulated by the irrational exuberance (The fashion to believe that Chinese economy would become a dominant of the world economy). If Chinese economic boom can be explained by any rational reason, the Bamboo capitalism may dominate over the world economy. But, if Chinese economic boom (A boom of the investment to China from both domestic and abroad) has been merely encouraged by the irrational exuberance, the end of fashion in investing to Chinese economy will induce a severe hard landing in their business cycle!

Science and Logics are subjective: Mathematics is only the objective science!

2011-03-23T13:44:00.000-07:00

Einstein and the modern physicists amended this formula into
E=MC^2
, which is the main stream theorem.

The old Newtonian model, E=MC, had never tested to assess whether it fit in with how actually the geometry worked in the real world. This formula was based on a pure assumption.

However, all natural science models, except those based on statistic modelling method, are problematic and highly subjective as same as logic.

The mathematical model is useful and costless, however all the signs and the sensitivities in the formulae are just assumed rather than produced especially in the old days when the computer technology and the statistic theories were not developed enough.

The reason why natural science is subjective as same as logic is as follows.

As a matter of fact, the results determine the theories rather than the theories determine the result in natural science. All scientists create their theories by finding the result to model them. However, many scientists always think that their theories contribute to find the results, and their thought is a completely false belief and merely a propaganda to make mass believe they are the authority.

Einsteinian and modern scientists' amendment of Newtonian science is the typical example. As these modern scientists examined how the geometry worked in the real world, they finally found out that the energy was not linear as what Newtonian scientists assumed; and then they changed the formulae.

Furthermore, these scientists claim their theories produce the mathematical models. Nonetheless, this is also the false assumption. They create mathematical formulae which "look like" as though they fit in with what the variables move. But, these formulae hardly become perfectly fitting with what the variables move in the real world because there is always an error (a residual in their formulae). The formulae may be valid if the error correction model proves the error tends to be corrected.

Nevertheless, this does not encourage to believe the theories produce the mathematical models: It is more likely that the mathematical models find the most appropriate theories. For example, in electro-magnetics, a physicist tried to make a mathematical modelling which models the movement of electro-magnetic by using various variables this physicist thought needed. However, the model did not fit in with what the movement is actually is. There is only another variable in the formula was needed, but this physicist did not know what this unknow variable was then. The task for this physicist then became to find this additional unknown variable. Then, this physicist finally found it, and tried the scientific experiment by referring to the new formula!

As Immanuel Kant, the famous German philosopher, said mathematics could be the only science which is objective.

Only the sets of "a priori", the objective measure verifying the knowledge emphasised is absolute, in the physical world (which is what I also called "the real world" in this article) are latitude, longitude, altitude, time, and immediate feelings. The other physical knowledge, in past, present, and future, only comes from the bias induced by subjective feelings and "expected" outcomes.

Logic does not have an objective measure to self-contradict to proof this makes sense unlike Mathematics which has a strong objective measure called "Axiom".

Scientific knowledge based on assumption offered by scientific logic is therefore not objective and highly subjective because it is awfully biased by the subjective assumptions.

If formulae and their variables, signs, and sensitivities are found by statistically analysing the data sets found in a survey or experiments in our real world, these formulae are at least verifying to be based on a priori of the physical world, latitude, longitude, altitude, time, and immediate feelings, and the mathematical world, axiom. Therefore, they are more likely to be objective.

Statistical models are useful to make semi-objective formulae because they can be proved and self-contradicted by "a priori" unlike the formulae and their variable, signs, and sensitivities are based on assumption based on pure logic.

* The following quote is based on what John Locke, the British philosopher called the father or liberalism, Immanuel Kant, one of the most influential modern German philosopher, and one of my mathematics teachers in one of the universities I graduated from stated:

... I believe in God; God is a fundamental axiom of our world; mathematics is based on axiom; both axioms, God and mathematical axiom, are "a priori", the objective measure verifying the knowledge emphasised is absolute; Mathematics assesses axiom; God and mathematical axiom are absolute; Mathematics has a power to assess something equivalent to God, the absolute being; The existence of God could be inferred by mathematics as John Locke stated in "An essay concerning human understanding"; As my Mathe teacher said God may admire Mathematics then; As my Mathe teacher said, Mathematics is equivalent to or more powerful than God; Therefore, I admire and believe in Mathematics, based on axiom, and Statistics, based on both mathematics and "a priori" of the physical world which may be called as God, as the only objective science!

Reading list of articles on line

2011-03-20T12:00:00.000-07:00

------ Econometric Data -----

* World Data:

- Penn World Table
http://pwt.econ.upenn.edu/php_site/pwt_index.php

- IMF, WEO Database, Country Data
http://www.imf.org/external/pubs/ft/weo/2010/02/weodata/weoselgr.aspx

- Penn Center for International Development at Harvard University (CID)
http://www.cid.harvard.edu/ciddata/ciddata.html

- Gleditsch and Ward, ‘Minimum Distance Data // Kristian Skrede Gleditsch ‘(2001)
http://privatewww.essex.ac.uk/~ksg/mindist.html

- Penn Actualités du CEPII, Geodesic Distances’
http://www.cepii.fr/anglaisgraph/bdd/distances.htm

- CIA - The World Factbook -- Field Listing :: Area
https://www.cia.gov/library/publications/the-world-factbook/fields/2147.html

- MarineWaypoints.com - Great Circle Distance Calculator
http://www.marinewaypoints.com/learn/greatcircle.shtml

- Paul Hensel's General International Data Page
http://www.paulhensel.org/dataintl.html

* UK and Scottish Data:

- Scottish Neighbourhood Statistics
http://www.sns.gov.uk/

- nomis - official labour market statistics
https://www.nomisweb.co.uk/

- General Register Office for Scotland (GROS)
http://www.gro-scotland.gov.uk/

------ Philosophy and Law ------

* Project Gutenberg (Public Domains):
http://www.gutenberg.org/wiki/Main_Page

* Max Stirner
- Egoism:
http://www.gutenberg.org/ebooks/34580

- Max Stirner (Stanford Encyclopedia of Philosophy):
http://plato.stanford.edu/entries/max-stirner/

* Jeremy Bentham

- An Introduction to the Principles of Morals and Legislation
http://www.utilitarianism.com/jeremy-bentham/index.html

- A Fragment on Government
http://www.efm.bris.ac.uk/het/bentham/government.htm

- Jeremy Bentham (1748-1832)
http://www.victorianweb.org/philosophy/bentham.html

* Jean Jacques Rousseau
- THE SOCIAL CONTRACT
OR PRINCIPLES OF POLITICAL RIGHT
http://www.constitution.org/jjr/socon.htm

* Matthew Arnold
- Culture and Anarchy
http://www.gutenberg.org/cache/epub/4212/pg4212.html

* J. S. Mill
- A System of Logic
http://books.google.co.uk/books?id=daQAAAAAMAAJ&printsec=frontcover&dq=A+System+of+Logic&source=bl&ots=_ObnctNc3D&sig=1YQntmmSeX6wmta0QRzQiOwa3NI&hl=en&ei=IDYjTZ35HMq2hQfwxpW4Dg&sa=X&oi=book_result&ct=result&resnum=4&ved=0CDUQ6AEwAw#v=onepage&q&f=false

* Erik Olin Wright
- http://www.ssc.wisc.edu/~wright/

* Adolf Hitler
- Mein Kampf:
http://magister.msk.ru/library/politica/hitla002.htm

* Egoism
- Rational Egoism (Stanford Encyclopedia of Philosophy)
http://plato.stanford.edu/entries/egoism/#3

- Rational The Ego and His Own: Introduction
http://www.youtube.com/watch?v=lNiyxnxId_4&feature=related

- Stirner on Egoism vs. Immorality
http://www.youtube.com/watch?v=VF4pyh5KESs

* Law
- A Primer on the Civil-Law System
http://www.fjc.gov/public/pdf.nsf/lookup/CivilLaw.pdf/$file/CivilLaw.pdf

- Wikipedia, Civil law (legal system)
http://en.wikipedia.org/wiki/Civil_law_%28legal_system%29

- Wikipedia, Equity (law)
http://en.wikipedia.org/wiki/Equity_%28law%29

- Wikipedia, Custom (law)
http://en.wikipedia.org/wiki/Customary_law

* Russian New Year Tradition Movie:
- The Irony Of Fate
http://video.kylekeeton.com/2008/12/russian-video-new-year-tradition-movie.html

The United State of America (USA) is an honourable country...! The USA is a savior! Thanks America!

2011-03-16T15:26:00.000-07:00

From CNN:
[1:26 p.m. ET Wednesday, 2:26 a.m. Thursday in Tokyo] The U.S. military will send an unmanned Global Hawk high-altitude reconnaissance plane to take photos and infrared images of Japan's damaged Fukushima Daiichi nuclear power plant, a Japanese government source told Kyodo News on Wednesday. The images could help workers figure out what's going on inside the radiation-contaminated buildings.

Useless Japanese government is struggling to communicate with all the ministries to tackle with this nuclear crisis.
Irresponsible Tokyo Electric Power Corporation (Tepco) oprerates an evil censorship on showing what really happening in the place where the nuclear occurs.
The defence force do not have enough equipments to wipe this crisis out and to rescue citizens out of this chaos efficiently.
Japanese ordinary citizens living outside the North East region are powerless and skilless to participate into volunteering to save people living in the North East region.

All Japanese authorities are not able to overcome the crisis rationally, and people have lost the confidence and suffer from depression caused by the anxiety. Then, Japan and Japanese people have seemed to face a doom's day since the plan to cooling the flaming nuclear reactor down by a helicopter became unable.

Nonetheless, meanwhile both Japanese government and Tepco, the owner of these nuclear power plants, which has been accused of its poor nuclear risk management, have been unable to tackle with this crisis, the United State of America (USA) declare to send a Global Hawk, an unmanned reconnaissance airplane, to take photos of inflamed immages inside the nuclear plant in order to enable to tackle with the problem rationally.

Japanese citizens should thank to the USA more than ever! Their own government and Tepco, the major private electric supplier, are useless to do what they are supposed to be able to. In addition, their own government and major private electric suppliers look like as though they are reluctant to participate in putting an effort on overcoming this crisis! Only Japanese government and Tepco are stammering...

The US unmanned reconnaissance airplane technology might also be used for carrying sea water to pour it into the heating nuclear power plant, which discharges the radio active contanimation preventing manned aircrafts and vehicles away.

On the top of sending Global Hawks, the US government and the US millitary are very enthusiastic, able, and confident to save Japan and Japanese people as thuogh they rescue their own nation and own citizens! The US government has an efficient connection skills among the president, the top authorities of the nation, the government, and all the ministries far more than Japan. The US millitary is able to utilise the most advanced technology in their country for good purposes unlike Japanese defence force is so retarted that it cannot utilise Japan's proud advanced robotic technology for this kind of situation...!

On the contrary to the US generosity, both Japanese government and Tepco are not only useless but also annoying.
Japanese government declared to raise the consumption tax rate further although we are in such a tough economic situation and the Japanese government has not done, and does not seem willing to do, enough what they ought to serve for what they are paid for.

German news media and some Japanese independent journalists revealed the fact that there are already 5 operators in the nuclear power plant died due to exposure to radiation and 22 operators are severely injured!
This has not been broadcasted by either Tepco itself or any mainstream media in Japan at all!
Tepco has never shown any information about the 50 operators working inside the damaged nuclear power plant, and the mainstream media companies. These Japanese media resources are too scared to broadcast because of the reduction of their financial resource from Tepco which is one of the major investors to these media companies.

Japanese residents should be ashamed to pay tax to Japanese goverment and utility bill to Tepco!
We are very happy to pay for the USA, but neither Japanese government nor Tokyo Electric Power corporation (Tepco)!!

... The better reaction to this crisis shall imply the better authority we shuold follow, this story tells!

Japanese News Reporting this topic

http://blog.livedoor.jp/dqnplus/archives/1607465.html

http://www.snsi.jp/bbs/page/1/

Nuclear Attention: Fukushima 3rd nuclear plant is operated by "Plutonium"

2011-03-13T19:39:00.000-07:00

Nuclear Attention: Fukushima 3rd nuclear plant uses "Pluthermal" turbine, which means a turbine fuelled by "Plutonium"!

Plutonium nuclear fuel is an extraordinally dangerous material which human-beings should be never allowed to use the daily-life electric supply!

The previously exploded nuclear power plants are run by "Uranium" fuel, whose system was able to be cooled down by damping water.

Nonetheless, it is impossible to cool the 3rd one fuelled by lethal "Plutonium".

If the worst case scenario occurs, it immediately blow up the civilisation with a serious nuclear dusts remaining there for generations....!

The oil price inflation is over exaggerated!

2011-03-08T18:37:00.000-08:00

This is my comment on the following Video-clip of Financial Times
http://video.ft.com/v/817731825001/Cheap-money-fear-and-commodities

As there is still a plenty inventory of oil enough to calm the stagflation down
all the investors are just over-anticipating the bad news in the future.
That is why the oil price is rising, but this price rise will be just temporary.

Therefore, we should not be confused between the fake shock and the real shock.
According to the commentator on this video clip, the current oil price shock is the fake shock.

I would recommend not to react against the current shock on the oil price.
The oil price will goes down after a while.

My concern is that the reactions toward this shock (e.g. the interest rate hike due to the expected inflation caused by this oil price shock) themselves will induce another economic recession.

The controlling inflation is a top priority of any monetary policy so that the reaction toward the current fear of the oil price inflation itself (raising the interest rate) is right.
However, the monetary policy has to re-set the interest rate down soon as the "temporary" price shock calms down in order to avoid the recession caused by the excessly high interest rate undermining a healthy economic recovery.

Hense, I recommend you neither to intend to purchase the oil in the forward rate agreement nor to buy the share related to the oil industry in the forward rate agreement.
Otherwise, you are predicted to make a loss in the trade.

Further stricter regulation on financial market is too "Draconic" !!

2011-02-21T13:16:00.000-08:00

Financial Times, Video Clip: Debate: the future of exchanges & banks
http://video.ft.com/v/793788680001/Debate-the-future-of-exchanges-banks

In particular, listen to this video clip from "9:56"!

Financial sectors are already the most regulated among all industrial sectors!

The further regulation on financial sectors is "Draconic" enough to weaken the competition of this market, and then it will transform the market more monopolist...ic and increase the risk premium caused by the mischievious acts by these monopolists!

About Scottish Nationalist party (SNP)

2011-02-19T15:24:00.001-08:00

If I had only a choice between SNP and Labour, I would choose SNP due to its microeconomic policy (Not sure yet about its macroeconomic policy yet though).

At least, SNP is planning to cut Scottish corporation tax to make it same as the Irish rate. This will surely stimulate Scottish economy and enable Scotland compete with not only England but also the rest of the world.

Replacing the council tax with local income tax is controversial. But, the local income tax SNP is planning to install can be beneficial to Scottish economy due to its progressiveness compared to the current council tax.

However, I still think the tax on "land" i.e. another sort of property tax is essential as the land tax is fairer than any sort of tax. Council tax could be fairer if it had accounted for the value of land which is measured by, for example, population density, contingency of pollution, possibility of extracting a natural resource, and the business value of the land itself. The council tax introduced by Labour is therefore a bad property tax.

In addition, the local income tax is still controversial as well although it is still better than the council tax. It will be quite complicated to have two income tax together with the central income tax for Westminster. I know SNP is planning to declair Scottish independence and replace the central income tax for Westminster with only one income tax for Holyrood. I know this is the reason why SNP wants to introduce the local income tax, which will become only the local income tax after the independence, to make it sure that there is already an income tax going into Holyrood before abolishing the income tax going into Westminster. Nonetheless, if I were an economic adviser of SNP, I would rather recommend to abolish the council tax while reducing the corporation tax only in Scotland sezibly to transform Scotland to be as though a tax haven. I know the government budget for Scottish independence is necessary. But, they had rather better attracting business because they can expect more tax revenue and donations from these corporations overall. After the declaration of Scottish independence, then they can introduce the income tax going into Holyrood.

Owing to the current Egyptian situation, the 21st century Trojan War may occur...!

2011-02-14T15:53:00.000-08:00

Oh god, I am extremely anxious about the increasing risk of another global crisis due to the current Egyptian coup d'etat.
If Islamic socialist government comes into the power in Egypt, Suez canal will be monopolised or even closed!

If Suez canal is monopolised or closed, the international trade system in our global capitalism will be impeded and then fall into a crisis!

Mr. Mubarak, the former Egyptian president, is a great laudoble political leader.
He has put a lot of effort into estabish a friendly diplomacy with the West, Egyptian community and political system evolving from a uncivilised unstable barbarian trive to a stable enlightened secular civilisation, and rationally particupating into an international trade.

Therefore, he has known that increasing the sum of utility in the globe as a whole benefits to Egypt and her people due to the reward from the civil evolution and rational particupation in the global trade.

The country where the stable civilisation had not established such as Egypt (withtout a leadership of any reliable suzerain such as British empire and the United State of America) had needed "development dictatorship" which enables this kind of countries to establish a stable modern secular civilisation.

First of all, Egypt had been a multi-cultural and multi-religious nation as same as Singapore and Malaysia has been and still now on. Therefore, as same as Singapore and Malaysia, Egypt had needed and still now needs development dictatorship in order to not only encouraging economic growth to sustain social stablity (I.e. avoid Chaos) and developing a civilisation but also avoiding danger of civil war.

Thus, the USA, who became the world leader after the WW2, dismissed the Egyptian independence from British empire.
If Egypt were to become Communist nation or Islamic Fundamentalist Socialist nation, the USA would have never tolelated the Egyptian independence without an intervention of any Western suzerain!

Libya would be more tolerated to become the socialist state due to less significantly important than Egypt. However, if Egypt becomes anti-liberal and/or anti-secular socialist nation, we will have a tremendously high risk of "the 21st century Troy War" !!

The real Troy war, which is different from the Troy war shown in Ancient Greek Mythology, was provoked due to the monopolisation of a transit port connecting Ancient Mediterranean Europe to Oriental World by Troy. This is reason why the contemporary Greek city states were badly frustrated enough to declair the war against Troy, the mercantilist state! (Referring to "National Geographics")

Basically, giving democracy to the majority Egyptians with the narrow world view, intolerance to global liberalisation, and ignorance of enlightenment, will surely result in their monopoly of Suez canal. By means of the current situation, monopolisation of Suez by these Egyptian socialist fundamentalist mobs will cause a global catastrophy which terrorises not only global economy but also social stability of civilisation in both the Western world and the whole Asia...!

If the frustration is marginalised, the severe world war will be provoked. Well, by being sympathetic to the whole globe and global citizens, it can be inevitable Egypt might be nuked due to rise of enormous anger of the entire world... I thank Mr. Mubarak, his regime, and his dear government which have avoided this catastrophic scenario!

Secure Suez canal for our international trade!

2011-02-01T17:01:00.000-08:00

We should never allow Egypt to provoke a socialist revolution!

Egypt has a Suez canal which is an extremely important area for the international market!

The West should send some troops and Egyptian government should encourage the counter-revolutionary act such as General Pinochet has done in Chile to secure Suez canal!

The sum of utility in this globe is more important than the sum of utility among Egyptian mobs!

In order to increase the liberty, elimination of certain individuals' freedom shall be certainly inevitable!

I act based on "my own ego" so "my" choice "if I have to make" is what I just said. My merit comes from the global capitalist order rather than Egyptian mobs' incooperation to the international trade and disturbance of our world economy!

We MUST avoid Edypt becomes second Libya!
Edypt is a geographically important place for "us"!
I hate to sacrifice our own merit by allowing Egyptian mobs' mischievousness!

Otherwise, Egypt turns into a socialist mercantilist state such as an ancient Troy, perpetuates a frustration of the other nations in the world, and then provokes a big war like the Troyan war!!

Basically speaking, I despise "Human Right" theory.
No one and no principle can guarantee to provide "human right" with our limitted resources and confidence to invest for!
We need to allocate our precious resources efficiently much as possible so that the "right" is also scarce.
In addition, we need to provide these resources including the "right" owing to individuals' merit.
The right for Egyptian mobs, who incur the risk to monopolise and/or close Suez canal, are less meritorious than the majority of our globe.
Of course, we should allow these Egyptian mobs to survive under the freedom of choise, but NOT THE FREEDOM OF LIVE! (Freedom of live is guraranteed by "legal system")

Democracy makes the government role to be big to mediate the individuals and convince individuals to achieve the goal their government requires as same as technocracy/dectatorship/theocracy.
These democratic objectives can be used as a propaganda to indoctrinating citizens as though the minority in charge of the government action makes the majority happier although the minority still hold the technique to make the minority happier than the majority.

Only the powers of justice is the "nature", "possitive reasoning", and maximised "utility"="profit", which enable us to select who should have and not have legitimately.
This statement is cruel and surreal, but leaving them to justice enables us to reach at the optimum equilibrium point of justice!
However, as we start interacting this optimisation process by installing the pseudo-moralistic "Human Right" into, it disturbs meritocracy, incurs unnecessary costs, and invade "our" liberty by subtracting our wealth!

I would always like to support our global market order and I feel comfort in it. I am always willing to fight for it. We should even fight against, not only Nationalism and Socialism, but also the "Democracy" in order to protect our glorious globalisation!

You British are so silly! As you guys were too soft on them, you handed your precious colony! I know you guys are lucky enough to keep Gibraltar, but your fault you guys allowed nationalising Suez canal!

You guys have been so spoilled by Nanny State, which is what you called Welfare State!
You guys have got to have been tough against any national socialist movement in your colonies, ex-colonies, common-wealth nations, and any allies!

I claim that British empire should never apologise for her imperialism at all!

Until our lovely great beautiful Mrs. Margaret Thatcher came into the power, Britain had been really irresponsible for the protecting the liberal world from the axis of evils!

Concerning Fiscal Conservativism and Keynesian, and European Integration

2011-02-01T06:55:00.000-08:00

My friend wrote as follows (shown in Italic letters):
I'd introduce a massive, wholesae Keynesian policy, of state spending to invest in infrastructural development and to uphold demand across manufacturing and industry. Then, utilise the subsequent growth to pay down the subsequent high debt levels.

Coalition is monetarist and fiscall conservative, thus I disagree. Labour aren't real Keynesians, they just want to spend money haphazardly all over the place - thus they are even more dangerously irresponsible than the coalition. Labours non-economics would merely result in protecting vested interests.

(My comment)
Although I quote a lot of Keynesian analysis, I am monetary and fiscal conservative. There is an example: One of the reason why I say is that I often refer to the "liquidity trap" mentioned by Keynesian analysis to reject the "hypowered money" mentioned by the one type of monetarists.

By the way, your theory faces on the contradiction:
(1) You support liberal economism,
(2) you support Keynesian policy,
(3) you support the European Monetary and Fiscal integration,
(4) you support the Federalism in the European Union level
(5) then you support Human right in the European Unionism

Then, (4)+(3)+(2) contradicts (1),
although (2) or (2) + (3) itself does not necessarily contradicts (1) if it is in a smaller scale.

If I were supporting your policy, I would add

(6) Abolition or minimisation of trade unions in the EU (at least to the US level), and setting minimum wage at the level of the most deprived EU member country.

and

(7) strong Fascist social policy intervention to enforce to replace the national governments with the branch local authorities of the European Federal government and to eliminate the enermies and the social defectors who disrupt the smooth European integration under the federal rule.

But if you add all up from (1) to (7), you MUST subtract (5) to accomplish all the rests.

If German 3rd empire had conquelled the whole Europe, the true and stable united Europe would have been established.

The current speed of the both economic and social European integration is too slow and too unstable!

At least, Britain should keep away from the wave of this danger...

On Bentham, Kant, and Aristotle concerning justice

2011-01-24T17:27:00.000-08:00

This TV programme
http://www.bbc.co.uk/iplayer/episode/b00xyzjw/Justice_A_Citizens_Guide_to_the_21st_Century/
only shows only 3 "liberal" philosophers who are fond of democratic system with a national government!

Honestly speaking, Bentham, Kant, and Aristotle are those whom I usually refer to and like. However, these three persons regard democratic system is essential for human-beings' happiness and have never refer to any possible system which may make human-beings more content than the democratic system these 3 guys infer!

As I am an Anarch-capitalist, these three guys are not perfect to make me convience! The democratic government to maximise the sum of utility, the democratic government to promote categorical imperative, and the democratic government to provide individuals to be social are hypocritic and possible to create a mistake by the misunderstanding!

Bentham explained what the objective should be.
Kant explained the pure reasoning is irrelevant to make a decision.
Aristotal explained how human-beings are naturally.

These guys are right in these cases.
Nonetheless, I disagree to have some sort of authority to secure these objectives, measures of determination, and expectations. Democratic system is just a form of autocracy different from a technocratic/dectatorial/theocratic autocracy!

I rather cling for the "spontaneous order" allowing individual agents to behave as they like following their egoism.
The natural selection evenutally chooses the best outcome based on the natural equilibrium.

Therefore, the government role should be minimum or none...
Democracy makes the government role to be big to mediate the individuals and convince individuals to achieve the goal their government requires as same as technocracy/dectatorship/theocracy.
These democratic objectives can be used as a propaganda to indoctrinating citizens as though the minority in charge of the government action makes the majority happier although the minority still hold the technique to make the minority happier than the majority.

The majority can be happier enough if they can be emancipated from these altruistic command to release their egoism!

So, I support revenge by an individual/s for the punishment instead of the government tortune, decision based on individual egoism rather than the duty which we never know who established and where comes from, and egoistic to decide whether individuals should be integrated with the others or keep the distance from the community to be highly individualistic depending on each different time, place, and occasion.

So many important news in Wall Street Journal today!!

2011-01-07T12:50:00.000-08:00

Hungary, Poised to Lead EU, Seeks to Smooth Differences - WSJ.com

China's Stealth Jet 'Leak' Not Seen as an Accident

Economy Adds Fewer Jobs Than Expected

Germany Shuts 4,700 Farms in Dioxin Scare

Polish Leader Rejects Bill Cutting Government Jobs

Britain Raises Threat Level for Transport Hubs

Sarkozy Likely to Suggest a Lesser Role for Dollar

EU Aims to Seal Deal With Beijing
"Europe is China's largest market, purchasing about $282 billion of the country's goods in the first 11 months of 2010, or nearly a fifth of China's total exports."
"If Spain can no longer access the bond market, will the Chinese lend enough to Spain to get it out of this crisis? I very much doubt it," "Nor would the EU want one of its members to become beholden to China,"

Trichet: 'Irresponsible' EU States Must Toe the Line
""Monetary policy responsibility cannot substitute for government irresponsibility," Mr. Trichet said. "

"Mr. Trichet also signaled no change as yet in the ECB's policy of buying government bonds."

"the sharp rises in the yields of some government bonds would lead to increases in banks' funding costs, which they would then defray by passing the higher costs on to customers.

Mr. Trichet also dismissed fears of rapidly rising inflation. "Europe has not turned into an inflation community. And it will not go that way," he said.

Euro zone inflation was much stronger than forecast at the end of last year, overshooting the ECB's 2% ceiling for the first time in about two years. The annual inflation rate increased to 2.2% in December from 1.9% in November, the European Union's statistics agency Eurostat said Tuesday. "

Currently, both the EU and the USA are against the free market principle

2011-01-07T11:18:00.000-08:00

In terms of microeconomic point of view, the common currency is beneficial to trade between companies across the border.

Nonetheless, the common currency does not imply the free market. The beneficiality of introducing a common currency in the EU is that the trade frequency between countries in the EU is significantly higher than the USA. However, the labour mobility rate between countries in the EU is significantly lower than the US counterpart.

It is not fully proven yet whether a common currency leads the economy to have a high trade frequency and the labour mobility across the border or these factors require introducing a common currency.

If the statement "Free market demands common currency" is valid, it should be that both the trade frequency and the labour mobility have been high before a common currency is introduced, and then a common currency should be introduced afterward. However, if the reason to introduce the common currency is to "expect" the trade frequency and the labour mobility to become high after introducing the currency, the aspect does not fulfill the natural mechanism of the free market. Under the free market, needs induce the supply; expectations are not necessarily relevant to induce the supply.

Under the current European situation, although the aggregate level of trade frequency across the border is high there are a few countries which do not fulfill the condition such as Ireland and Greece. Furthermore, there is a huge barrier of introducing a common currency under the free market principle which is the labour mobility. If the EU situation is that the free market demands the Euro, the labour mobilty should have been much higher than what the EU has got.

All in all, I would like to strongly put emphasis on the statement that both the EU and the USA do not hold their own single currency used among their own states or countries inside them due to the free-marketism.

For example, as a matter of fact, the USA should abandon the single currency system and her federal government interaction into her market if she wants a free market! The US market has a significantly lower trade frequency across the borders between her countries than the EU and Asian economic regions. The current US situation craves for the strong federal planned economic intervention in order to stick these individual states with being the United States of America!!

In order to accomplish to estabilish a free market system, abolition of nation states is necessary in order to allow all individual regions to become free from any planned economic intevention. Overall, nationalism and unionism never go well together with a free market! "Anarch-Capitalism" is only the answer to support free market!!

Land tax is both fair and progressive

2011-01-04T16:55:00.000-08:00

Income tax is progressive i.e. an effective tax collecting method if we consider about the marginal propensity to consume and save.

But, it has a high risk to disturb "equity" (synonym of fairness).
It discourages the wealth accumulation by hard working and penalises those who bring an income and/or a talent into that economic region.

The most effective tax is on "land"! Land is a common good and its externality such as pollution and over-population is high contiguous to the others.

Furthermore, land based tax is effective to control the business cycle more than income tax.

Income earners may earn their income in a particular region and spend and invest it in outside this region. Therefore, the effect of income tax is contigent to areas which are not accountable to controlling a business cycle of a particular region.

In addition, the means of production of income is a combination their working effort and a reward from investment. Income tax simply means to penalise working effort and investment. Therefore, income tax has a risk to stagnate the economic productivity.

By contrast, if some one uses a land, it simply means s/he utilises the value of this land. People can utilise to live in a household on it, earn income in the firm on it, and invest into a property on it. These activities also contain working effort and beneficiality of investment. However, unlike income tax, people utilise land to do these activities. These activities can cause pollution, over-population, and business cycle overhear or slump. Furthermore, the means of land tax is hardly contiguous because it directly burdens taxes on the land where the economic activity is derived from. All in all, the land tax accounts on the "equity" of utlising and costing it. Thus, it fulfils the condition of "equity" i.e. fairness.

In addition, land tax can be not only fair but also progressive. High income earners are more able to buy and keep the land with a high value and/or high costs than the rest. Then, land tax is able to tax in proportion to the marginal propensity to saving (In terms of the absolute income hypothesis, consumption of permanent items such as households and lands and investment are considered as a part of saving).

P.S.
I support abolition of taxes on consumption such as sales tax and VAT.

As long as the price elasticity of demand is low, it is a fair indirect taxation because individuals pay as they use.
It is regressive but fairer than the inflation tax (High inflation)

Nonetheless, tax on consumption stagnates economic active level because it harms not only on consumers but also producers. If the price elastiicity of demand is high, then the penalty on producers is much higher than on consumers. Therefore, it is NOT FAIR because it pernalises those who increase the sum of utility among individuals!

Tax on consumption is highly contiguous to those who are not accountable to pay the tax. As we know this tax is not able to control over business cycle and burdens those from outside the economic regions where this taxation exists. Therefore, it disturbs the business cycle and causes moral hazard of taxation (Those who are not responsible for the tax also pay tax!).

Corporations which have a high volume of export gain a high volume of tax rebate. This fact discourages small businesses, creates a barrier for new firms to get into the market, and reduces the internal aggregate demand.

Announcement

2010-12-20T08:31:00.000-08:00

I disabled the comment posting setting due to the security reason.

I would like the others to send a comment to the following E-mail address:

Thanks for your attention, and hope you enjoy reading articles on this blog.
I am always pleased to have your comment on these articles :)

"There is no such a thing like society" because "Human-beings are naturally social"

2010-12-15T01:53:00.000-08:00

THERE IS NO SUCH A THING LIKE SOCIETY!!

We'd definitely better say "community" or "institution" if you want to mention the macro environment where a cohort of individuals gathers into.

Human-being is social itself. There is no such a superstitious thing called society! Therefore, human-beings are social each other, so any institute such as a state or a corporation does not need to concern about the empty meaningless superstition called society!

If any instiute enforces individuals to be social by following their vision of sociality, it fails into the oppressive totalitarian serfdom which transforms majority of individual human-beings to beasts!

Only the best alternative policy is to leave individuals and their family alone to allow them naturally social themselves. All in all, the sociability of individuals is not a business of any institute and community!

Oh, I must note that I despise Burkean philosophy so much!
Burke said the tradition is a fundamental guidance of how human-beings should live. I know Burkean theory remains some freedom and liberty, but the idea of common sense guided by tradition is a burden on progress and liberty.

Although human-beings are social, but not capable to define what is a true natural law. Aristotle did not much mention about the tradition although Aristotle is a natural law theorist. Aristotle mentioned the natural law is invisible and difficult to define. Even some academic commentators claimed that although Aristotle said virture is a significant factor of human-beings he has never indicated virture as a moral objective.

By contrast, Burke seemed to insist that virture is an objective and derived from the tradition. But, using tradition as a moral guide line is a dangerous idea. As Bentham said the moral guide line should exist for the future not the past. Tradition, i.e. the past experience, might have been functional in the past, but never 100% significantly functional in the future. This guide line is not able to the existence level and the future optimum level of the pleasure and the pain for individuals. We are able to regress some past data sets and experiences to construct our future plan, but there is always an error in them! The errors derived from psychological senses and indoctrinating moral entreneurs should be omitted by civil action and people's party!

All in all, I declair to say that I am strongly against the statement "Society is the only true state of nature, and reason is to be conducted within tradition". Only the thing whose reason is to be conducted within tradition is a mal-functional guidance of miss-used moral entrepreneurship. It is waste of time to define society as there is no such a thing like society: There are only individuals and their family...!

Tackling on criminal acts with the utilitarian philosophy

2010-12-15T01:51:00.000-08:00

In terms of my consequentialist point of view, the legislation system should have provided the incentive which prevents individuals to commit a crime serious act. If there is a criminal act, there is often a derivative branch of the mischief of a criminal act. There is a raison d'etre of a criminal act. In order to decline the number and the quality of criminal acts, the priority is to tackle on the "cause" of crime.

We certainly need a negative sanction (i.e. punishment!!) which is measured owing to the equivalent pain to the pain a victim suffers from. "Mouth to mouth and teath to teach" method sounds uncivil but is certainly necessary and works for preventing some criminal acts. Some severe crimes tend not to decrease by this method according to the statitstics. But the system still need to remain this method in order to equate the pleasure and the pain of both sides. In order to decrease these severe crimes, which are not significantly correlated with the level of punishment, we need to tackle on the "derivative branch" of the mischief of these acts!

Some criminal acts need to be legal or decriminalised such as usage of some recreational drungs (in philosophy of law, it's called some categories of self-intoxication), ganbling, doing and buying prostitution because these acts bring pleasure and are possible to prevent the pain derived from these act by installing a proper legislation. Or, we need to provide individuals the "substitutions" of these goods and services like what Islamic society does.

The severe criminal acts such as murdering, hatred, conspiracy, and organised crime, need a severe punishment by either a public institution or individuals themselves. But, in order to reduce the cost and the derivative branch of the hatred, we need to tackle on the derivative branch of the mischief of the criminal acts...!

Britain, outside the Eurozone, should not lend money to Ireland

2010-11-18T16:49:00.000-08:00

Britain doesn't have any accountability to this Irish failure 'cos Britain is not a part of the EMU!

Unless either Ireland leaves the EMU or the Eurozone decided to Federalise itself (i.e. replace the national debts with the ECB bond, and replace the unstable fragmented fiscal policies with a stable common treasury) , investing Ireland contains a high risk premium!

Lending money to individuals with a high risk premium requires charging a high interest rate enough to cover the risk premium because the lender should not make a fatal loss on a budget, which causes the lending country to fall in to another recession.

A relatively well-off country shouldn't be penalised save a country with an insoluble trouble! The current policy will knockdown both the relatively well-off countries, such as Germany and Britain, and the countries under the crisis!

It's highly dangerous to lend money to those which have a high risk premium!

I would have agreed with you if Ireland weren't in the Eurozone.
Under her crisis, the common currency system is a fundamental cause, so the Eurozone countries are much more responsible on her crisis than Great Britain.

The reason why Germany could lend money to Ireland was that the stimulus to Ireland, the same organ of the common currency system, also stimulate the value of Euro, so it is beneficial to Germany in a long term. The value of Euro is influenced by the value of all a whole set of Eurozone countries.

However, the stimulus by Britain, who is in outside the Eurozone, won't encourage Irish economy, the tiny part of the Eurozone. If Ireland had kept her own monetary policy, British stimulus to Ireland causes to the appreciation of Irish economy, therefore it would have induced the healthy inflation which reduces the net present value of the money borrowed at the time Ireland borrowed. Therefore, the motivation to invest into capital in Ireland will be encouraged 'cos of the expected inflation.

On the contrary to this function, the current system doesn't enable Ireland to reduce the net present value of the money borrowed unless the entire Eurozone economy is stimulated. Although the British stimulus to Ireland may boost her economy in a very short run, because the velocity of money invested will be very low or even zero, Irish economy won't be stimulated enough to recover from the recession due to the low inflation expectation.

All in all, the responsibility of Irish economy is based on the accountability of the entire Eurozone. British investment to Irish economy will simply be a waste of money unless Britain charges a high interest rate.

... Politicians tend to lose the perspectives from a financial and economic analyst. If we lend money, all the factors have to be put into a calculus! We must not forget about the dynamic impacts of Financial Engineering on an international public sector economy! The simulation taking the inflation expectation, impact of the monetary union, and risk premium into consideration must be run! It's dangerous to rely on the Pro-Europeanist transcendentalism any more! Realistic financial aspects based on the cost and benefit analysis should be taken into the consideration well!

Eurozone fiscal integration is required soon as possible!!

2010-11-02T11:05:00.000-07:00

-------------------- References ----------------------
Debt costs jump for Dublin and Lisbon
(Financial Times)

Ireland Adds to Euro Zone Woes
(Wall Street Journal)
-------------------------------------------------------------

A country in the Eurozone is required to pay a high interest rate to borrow money from another country in the Eurozone. This is the first attempt to make all the Eurozone countries to be responsible for helping each other without claiming any help from the outside European Union (EU). As long as Maastricht treaty restrict the rate of national debt balance to GDP, Eurozone countries are not able to incur their national debt enough to stimulate their economy. Therefore, the relatively well-off countries joining the European Monetary Union (EMU) are expected to subsidise the stagnating countries.

However, lending money to individuals with a high risk premium requires charging a high interest rate enough to cover the risk premium because the lender should not make a fatal loss on a budget, which causes the lending country to fall in to another recession.

This Eurozone macroeconomic policy is very unstable!
Mr. Jean Claude Trichet(Read about his articule in this blog!) also highly criticised this unstable fiscal rule, charging high interest rate for countries borrowing from another country inside the Eurozone.
Mr. Trichet is remarkably intelligent enough to realise the current Eurozone economic system is notoriously unstable.

The Eurozone should install the European federalism with the ECB bond by relinquishing the right to incur national debt in all the Eurozone nations! Otherwise, the EMU should be dissolved (i.e. abolish Euro, the common currency), and remove the restriction on incurring national debt stated by Maastrict treatyin order to enable them to set their own interest rate for their own monetary policy to adjust their own money supply and their liquidity to their economic stimulus.

If the ECB bond is incurred, the value of national debt traded in the international market is determined by the economic performance of the Eurozone economy. Instead of penalising a relatively well-off Eurozone country, the Eurozone economy should incur the bond with their collective responsiblity. If the debt is incurred by the collective responsibility, the risk and the interest rate is spread out to all the Eurozone nation. Therefore, one country doesn't have to pay an excessively high interest rate meanwhile a relatively well-off country does not need to be penalised (Although they might need to contribute to pay the interest rate of the ECB bond, but the cost and the risk are still obviously lower than the cost and the risk of lending money to a country in a terminal recession).

In addition, if the entire Eurozone economy is expected to recover by the fiscal stimulus financed by the debt, the value of the ECB bond will continue increasing so that more traders will purchase it. A high volume of finance flow from both private companise, individual citizens, and the government outside the Eurozone will be expected as the ECB bond is introduced. This is the golden rule of the national debt. As the credit rating of the ECB increases, the limitation of incurring the debt will be less restricted unlike the current Eurozone system.

The current Eurozone system will stagnate the Eurozone economy further. In order to avoid this situation, the Eurozone economy "has to" either dissolve the EMU or establish the common treasury under the Euro-Federalism. Nevertheless, in order to establish the more stable system than now by keeping the common currency, a furthermore efficient fiscal policy (spending on the government expenditure with a lower cost of taking tax) needs to be put into practice. On the top of it, the fiscal policy in all the Eurozone country has to be strictly counter-cyclical to their own business cycle relative to the one of the entire Eurozone in order to adjust their economy to be harmonised with the entire Eurozone economic environment. One country will no longer be able to diviate their fiscal policy rule from the other Eurozone countries.

Privatisation is important to balance the money supply and the productivity level!

2010-10-22T08:23:00.000-07:00

I know because the demand for British rail was 1/3 of Japanese counterpart for example. The demand was not enough to cover the cost. But, it was because the preference of people was shifting from train to car or bus at this time. But, now, as the demand for trains is increasing, more investment and more revenue are coming!

It was dangerous to sustain so much public sector industries as the money supply was too much higher than expected for the productivity level, which caused the hyper-inflation.
Britain didn't have a great train technological level despite the historical fact that she was the first best nation invented train.
Britain didn't have a capability to compete with Japan, France, and Germany with the technology and the demand.

Speaking of Russia, it definitely needs a privatisation as the technological level is still at the one at the premodern period...

For example, Japan wants to invest more on Russian oil firms.

Both Japan and Russia is interested in Japanese technological and monetary investment into Russian industries.
But, Russian's first task is to modernise the "management" structure!
It'll be more flexible to privatise to welcome the foreign ideas of administration
into the industries.

Oh, Mr. Schwarzenegger! I respect you, sir!
I strongly agree with Mr. Schwarzenegger and what he just said!

Yep, Russia is a 'a gold mine' with an 'extraordinary' economy and a greart supply of the girls!

...I am really glad for Russian people that the global society is willing to invest into Russia as soon as Russian market is openned up! Privatisation of Russian industries is even more emerged!

A Japanese man living in the UK as a temporary resident supports the UK Independence Party!

2010-10-19T04:55:00.000-07:00

Well, I support the UKIP although I am a foreigner in the UK...

Well, the situation won't change anyway. My VISA goes until 27th Jan 2012. On the top of it, unless I get a specialist job, I'll be kicked out then. Therefore, it doesn't make much difference :)

The temporary immigration freeze is probably important due to the current UK situation. The excess amount of immigrants are flowing into this country. I suffer from it, as these immigrants have made a bad reputation for "all" the immigrants!

The fair aspect is that this policy applies to not only me the non-EU citizen but also some EU citizens draining the benefit!

Furthermore, the UKIP policy is at least making fairer for all the immigrants! The current EU policy makes such an unfair situation for immigration! Even the Guardian, the remarkably left-wing news paper, mentioned the same stuff!!

If the UKIP is elected, the relationship with the USA, Japan, and the common-wealth nations will be revived! Because Britain doesn't have to be attached too much to the EU. Britain has such an independent history and culture pollitically and economically from Europe.

All in all, the immigration law becomes fairer and symmetric between the EU and the rest of world.

Fruthermore, British economy won't be tied up to the EU treaties any more. UK independence enables Britain to have her own fiscal policy, which stimulate their economy without suffering from the EU intervention, and keeps London city as the biggest financial district in the world!

Support the government plan to scrap a cap on the tuition fee for equity

2010-10-12T08:13:00.001-07:00

I strongly support putting a cap on the tuition fee!

I believe in "equity" so that we should expect for what we paid for.
"Equity" shall be protected! Therefore, we should expect to get for what we paid for.

Well, the government just announced abolition of the "cap" on the tuition fee. So, it's totally up to individual educational institutions' choice.

Some schools with a high demand and/or a high cost eventually put their tuition up.
But, some... schools won't be able to raise their tuition so much as the demand may decrease so the revenue may decrease.

This country is a sort of weired as the financial administration of all universities is centralised. I think, as same as the other countries, it will be beneficial to decentralise the decision making for a financial administration.

Furthermore, if the government keeps the currently ongoing lump-sum subsidies under the unfair (not "equitable") system, the government will suffer from a huge budget deficit so that will raise a tax or incur national debt. But, as long as I observe the current UK situation, this public expenditure doesn't seem to stimulate the productivity enough! If I were the government official, I would have done the same thing as the current government. I shall abolish a waste of "public" money invested into an unproductive investment!

The matter is that we need to think as though the person or the organisation who invests to it. The investors don't care where they are from: They care about how the clients of their investment benefit back to them for what they invested to.

Furthermore, I disagree with the centralised administration for the education system. All school shoulds have a different policy. Some good schools inevitably have kds from wealthy background, but they may provide a scholarship (not by government, by this school finance) to some talents from poor background. Some schools just gather students from various schools as the total revenue will increase so that it may be possible to raise the level of education to compete with traditional good schools. :)

I don't care too much about the social mobility. As same as Mrs. Thatcher said, parental responsibility should be more emphasised in this country more! The counter-revolution against the Nanny-state should take place soon as posible!

Overall, I strongly support this government agenda and Mrs. Thatcher.

"The beneficiary of the first hereditary honour to be created in many years!" --- Mrs. Margaret Thatcher, the former British prime minister

In addition, although these countries participate into the EU central taxation system, the quantity of tax payment is not symmetric.
In consequence, some individuals in the EU paying less tax take an advantage of this system than those paying more tax.

On the top of it, the EU central fiscal policy is not full centralised so that the fiscal regulation (e.g. controlling and reducing underground economy) is not fairly applied to all the countries.

Therefore, if we want to expect the fully subsidised education for all the EU citizens, the more strictly centralised and fairly censored fiscal regulation should be strongly required!

At least, they should abolish both the free tuition fee and the lump-sum subsidy for EU citizens! The EU fiscal policy is compromised, disorganised, and assymetric! Some EU citizens paying less get more than those who pay more now! If I were an EU citizen, this is a legitimate reason to provoke a coup d'etat against the administration! This is why I would definitely support the UKIP if I were a British citizen.

All in all, at this current situation, I strongly disagree with the fully subsidised education for all the EU citizens unless the previously mentioned condition is fulfilled.

Analysis of the UK labour market and the immigration

2010-08-13T09:42:00.000-07:00

I agree with the statement that "Britain has an oasis of talent only problem is they recruit all the crap." Great Britain has educated so many talented people, especially in Scotland, but they tend to leave this country because of this fact.

My point is that the UK and the Western EU countries tend to prefer the EU imigrant to the non-EU altough the one from the EU has a lower class qualification than the one from the non-EU. I have seen the fact. Furthurmore, they prefer Japaenese citizens who have already got the UK permanent residencial VISA to the Japanese persons who do not like me. It is mainly because of the bureaucracy. The companies tend to want to avoid the extra bureaucracy. This is the statement that the recruit agencies told me as well!

In 1990s in Britain, there was a notorious wage inflation. I am sympathetic to the fact that the UK Labour government wanted the cheap manual labour force imigrants from the EU Eastern European countries to calm the wage inflation down.

But, my concern is that the "intermediate class" job which I have been trying to get. When there is an obvious a world class achievement indicated in the CV, it does not matter. But, such indivdiuals with this sort of CV are not majority. Majority of the applicants of skilled non-manual jobs are highly discriminated between the EU and the non-EU. Because this sort of job is difficult to access propery.

For the manual labour jobs, it is irrelevant to measure the specific skills apart from the efficiency to work under the cheap wage.

But, my situation is not entirely fair condition. I have spent 6 years for the education overhere, and obtained MSc and Honours in Bachelor with a good grade.

As I also studied in microeconomics in MSc, the information on the labour market tends to be assymetric so that the insurrance and the personal connection exist there to avoid the unseen risk.

Of course, people recognise if there is a world class achievement. But, as a matter of fact, this kind of labour force is such limitted.

My favourite quote of Max Stirner

2010-08-12T09:36:00.000-07:00

“He who must expend his life to prolong life cannot enjoy it, and he who is still seeking for his life does not have it and can as little enjoy it.” --- Max Stirner (Anarchist)

Japan will be far more isolated from the global community...!

2010-08-12T05:33:00.000-07:00

* The News from

Wednesday, Aug. 11, 2010

Budget cutters target JET
'Amakudari' excess or 23-year success in soft foreign policy?

Who want to go to Japan to friendly communicate with Japanese? Only those paid by them do! Any people from the advanced Western countries coming for business would not have much time to communicate in the local community.

This has been the only way the ordinary Western people (North American, Western European, Australian, and New Zealander) come to Japan, and Japanese could know their civilisation and culture! I was highly benefited by this JET programme! If there had not been this programme, I would not be successful like now! Japanese government should cut the other "Amakudari"; not the JET one!!

UK Conservatives and UK Independence Party: The Dream Coalition!

2010-08-11T15:12:00.000-07:00

I sincerely wish if the Concervatives and the UKIP had made a coalition!!

The UKIP considers that the EU too much put priority on the EU citizens to expell all the non-EU talents like myself! In particular, as the Conservatives are more likely to be away from the tie with the USA and Japan, both US and Japanese individuals willing to contribute to Great Britain are suffering from the discrimination made by the EU-leaning current UK politics!

Even Guardian, the flaming lefitie news paper, says that the majority imigrants from the non-EU tend to be far more diligent than those from the EU (they do not say all EU imigrants; majority of EU imigrants attempting to imigrate to the UK)!

In terms of my political opinion based on my own situation concerned, I support the UK independence from the EU to make the UK Anglosaxon styled country who welcomes the skilled and/or sane diligent imigrants like the USA, Canada, Australia, and New Zealand!

I rescpet Jean Claude Trichet

2010-08-05T16:08:00.000-07:00

* The News from

Trichet Says Economy Is Strengthening, But Outlook Remains Uncertain

Although I am highly sceptical about the currently ongoing system of the European Monetary Union, I really respect Mr Trichet! This is the "good example of monetalism" i.e. not a nihilistic and normative monetalism: Trichetian monetalism is realistic and functional! I really think, among the advanced nations, the US Federal Researve and the European Central Bank are respectable central banks: I seriously despice the other central banks in the advanced countries such as Bank of Japan and Bank of England! All in all, Mr. Jean Claude Trichet is a great governer! He is from Nancy in the north east of France where I visited once and is famous for Art Nouveau and Jeanne d'Arc. This proves a civilised place nurtures and educates such a civilised person

Yep, as long as the EU is willing to amend the current unstable structure of the EMU, the Eurozone economy will develop further and take an initiative in the global economy.

I am totally apathetic about the ideological issue, but I strongly concern about how the newly invented common currency system and the evolution of European unionism go on in the future!

I would say, the Euro is short in the short term, but long in the long (probably and the midium) term!

Mr. Trichet had a right choice to keep a certain level of interest rate unlike BoJ and BoE having setting sizeably low! Furthermore, as the interest rate goes up (what Mr Trichet has done) , the demand of purchasing national debts goes up, and the positive inflation will be encouraged due to repressing unnecessary supply of capital and encouraging a strong capital fonded by the increased saving. As the positive inflation occurs, the nominal wage starts going up by wage burgaining because the price of goods and services eventually goes up so that people have to burgain for their income. But, as the export demand increases the employment won't decrease as the overall productivity goes up in this economic region by rise in the interest rate. Good courage!

A topic on Scotland, Thatcherite policy, and ethic of political economy

2010-07-25T07:27:00.000-07:00

Yeh, communism sounds nice if the property right for men to monopolise a girl and all girls are entitled to be a shared communal property! :)

I also like the fact that Scotland has more liberal and secular policy

Speaking of Mrs. Thatch...er, I always focus on the entire UK. Scottish fiscal autonomy has been violated not only by British Conservatives but the other parties, not only Labour but also Lib-Dem and SNP (They seem to claim to be one state of the EU rather than the total Scottish sovereignity). Yeh, Scotland shuold have kept their fiscal autonomy to form a quasi-communist state. But, it did not happen. The fact was that majority of Scottish people did not revolt against British unionism (There were as I know but the number was not enough). At least, I strongly believe, and aspire to always put emphasis on,that, for England, the policies introduced by Mrs. Thatcher was correct! As England had a higher population, Britain always puts priority on England for sure. Speaking of Scotland, some of what Mrs. Thatcher has done may be to blame. But, majority of Scottish have thought themselves as Brittish. If your idea ought to have been put into practice, these Scottish British nationalist fananitics shuold have been convinced into your policy. Well, overall, it was Scottish fault to keep Scotland as a part of Britain. It is totally inevitable that the mainstream policy was adjusted to Britain. I feel sorry to Scotland, but it was a fact.

> We need fiscal autonomy so to grow our own economy and roll back the state and breath life into our society again.

I do not disagree, and I think it may function well as long as people have a freedom of choice (e.g. selecting a job) and t...he system does not violate equity (Earn as people put effort on, and use as they spend). Although, ideologically speaking, I am an anarch-capitalist, but realistically speaking, we need some industries operating as a public sector such as electoric power generation (because it uses nuclear), land, sex, drug etc.

>Scottish people see themselves as Scottish first

According to the information I gained from the history books, only recently Scottish people re-started to identify themselves as Scottish first. Upto 20th century, Scottish have indentifed themselves as British first due to the influence from the pride as a part of British empire.

Well, I am a hard-core supporter of Mrs. Thatcher as long as I consider about Great Britain as whole. I know her policy penalised Scotland for sure. But, meanwhile I am sympathetic to you, I am never sympathetic to majority of Scottish people at all! At the contemporary time, majority of Scots deserved to be a part of Britain. If someone disagrees with this statement, I would mention the fact that they never tried to revolt for the autonomy? If Scotland wanted to obtain the autonomy, majority (at least 70%) of Scots should have revolted much radical ways without the fear of English resistance much before Mrs Thatcher came into the power even though I love Scotland (It's a duty)! Scottish should have abandoned their identity as Britain in much earlier stage! It is the fault of majority; not a minority like you. If I were born in Scotland as a celtic, I might have joined your political division, but I am sure this division would have lost unfortunately due to the disharmony with the majority of mass unless it has had gained a massive support from the outside UK such as from USSR, France, American continent, or even Far-East nations etc.

>I do not want independence from Britain and I share your concern about the EU.

I am glad you share the same oppinion as mine.

>Scotland is a joke! it is a tragedy living here, no wonder so many leave!

But, as same as me, there are a lot of people having been attracted to Scottish culture and civilisation.

The 5 conditions to join the European Monetary Union

2010-07-10T11:37:00.000-07:00

There are the 5 conditions:

1. High trade frequency with the Eurozone
2. Flexible Labour Mobility
3. Harmonised Business cycle with the Eurozone's
4. Sophisticated fiscal policy and a long history of the tight monetary policy
5. Political integration.

The score for the UK:

1. Tick!
2. Tick! But, conditional. The UK should stop the unfair welfair distribution system! The way to select the individuals to gain the benefit much more carefully...
3. No. The financial regulation system has to be more centralised and controlled by the mainland EU.
4. Not too bad compared to Mediterraneans.
5. Conditionally tick. Depends on how the USA reacts, and how the EU performs in the diplomacy. In addition, the nuclear issue is a big matter! The UK nuclear technology sharing must shift from with the USA to with France. All the nuclear plants should be owned by the EU gov't!

The biggest challenge for the UK to join the EMU is the question No. 3. The UK has a strong trade tie with outside the EU, and the UK industry has been sustained by her remarkably famous very liberalised financial market. It'll be a big challenge for the UK citizens to abandon their tradition as the centre of internationan financial market... In addition, the problem of the question No. 5 is France.

France has to abandon her nationalism! France has to make the nuclear technology shared with the EU gov't!

>I'd be keeping an eye on German politics. They are paying for the Greeks and others.

I think (and feel) the continental Europe will survive with the EMU. In fact, meanwhile the EMU needs to enforce transformation (It will be oppressive) to the European Federalism, the economy eventually will be stabilised and face an economic recovery in 2014.

Creation of the "Eurobond" is better than enforcing one country or a few countries to transfer their tax revenue.

If I were the EU governor, I would have made all the Eurozone countries to DEFAULT in order to abolish all the national debt of these member countries. Then, all the fiscal stimulus packages should be paid off by the "Eurobond" i.e. collective responsiblity among the all Eurozone countries. This way will give much better prospect for the economic growth inside the Eurozone so that the Golden Role will be encouraged. In this way, the Eurobond will be more popular to be purchased so that the EU finance will be much lucrative.

In addition, I wonder how the USA reacts, and how France is willing to share the nuclear issue with the UK.

* The advantange for the UK to join the EMU:

1. Becomes easier to establish a branch of Europe in the UK and of the UK in Europe.
2. Financial market is more integrated with the EMU countries so that the risk of shock in the financial market is shared among the EMU countries
3. If the Euro-bond is created (This is the final condition to support joining the EMU!), the UK will take an advantage of the credibility of the Euro and the Euro-bonds (Creating the common currency also requires the common bond i.e. abolishing the national debt system)

But, whereas there are various advantages, I am a wee bit still sceptical about this integration...

1. The power of trade unions need to be diminished (Which is good, but the wage bargaining power of labourer in the entire EMU needs to be 10% or below so that the riot of labourers may occur)
2. The fiscal policy should be dictated by the EU central gov't, and weaken the dicision making power of the national gov't (especially during the first step of the estabilishment: It can allow more decentralisation after the status-quo of the EU federation is stabilised)
3. Immigration law for non-EU skilled labour force will be much stricter than now so that I am wondering if """I""" may have a disadvantage :( (This is the statement the UKIP put emphasis on)

Why The United States, Europe, and Japan are heading toward deflation, a classic prolonger of crises. further?

2010-07-10T07:59:00.000-07:00

‎
If I were a governor of central bank in any of them, I would have "INCREASED" the interest rate rather than putting it down to the zero rate...! :(

We'd rather better "restrict" money supply to increase the value of currency and increase the interest rate to encourage the trade of national debts! The investment rate won't increase due to the liquidity trap anyway so that we'd rather better decrease the excess supply (of capital), i.e. cutting down the unnecessary supply in a Short run. In the middle run, as savers gain the interest rate, unnecessary enterprises will be closed down, some productive enterprises will put a prise rise so that labourers (mainly unions) will also start bargaining for their wage, etc in the middle run.

Speaking of national debts, we'd rather better increase the interest rate in order to stimulate the demand for buying debts as a traded equity. As the interest rate starts going up it means the price inflation of these bonds. As the inflation of commodity, i.e. national debts, people start buying them and trade each other. As the exuberance to buy a national debt is encouraged, the public fonding is coming into the gov't budget i.e. the Golden Role occurs.

Are the bunch of buggers working in these central banks and major financial institutions real elites? I often think I'm much superior to them? Ain't I insane to say that?? Oh, God...

>will be the biggest challenge to democracy since the Second World War.

As I said in my blog, according to Kondratieff, we are now in the "Winter" which will cause the huge mass destruction as same as WW2 and Spain-America War. Until reducing the excess supply of capital and discovery of a new techology and/or a new natural resource take place, the winter won't end.

>I really do not think governments will be able to take the people with them when it comes to reducing our respective deficits unless the private market fills the gap.

I always claim people that the IS-LM model fails! It is useful to demonstrate a plausible explanation to indicate how the monetary and fiscal policy work. However, this model isn't proven by any statistic analysis. As Prof. Paul Krungman said many economists say lie. The IS-LM model always encounters the simultaneous problem (impossible to predict the change by using explanatory variables because these explanatory variables are also influenced by the dependent variable) and depends on the "sensitivity" of variables e.g. interest rate, tax, etc. As a matter of fact, I should be called a radical government sceptic. Although I admire the analyses introduced by J.M. Keynes, the possitive planning always suffering from "sensitivity dependency", "effect lagging", "violation of equity", etc.

According to Kondratieff cycle, the Spring won't come until 2014 at the earliest

2010-06-27T12:21:00.000-07:00

We are experiencing a serious economic recession now. No economic policy will work to overwhelm the recession. Increase in saving no longer works as there is no place to invest the money in. Keynesian economic policy only works to avoid the hard-landing and slow the speed of economic downturn. The market potential indices explained by New Economic Geography theory do not have a positive impact on the productivity when all economic regions in the globe are in the recession or the depression. In order to expect the long-run recovery, it requires an exogenous shock such as a technological innovation and discovery of a new natural resource.

According to Kondratieff cycle theory, the current economic recession should be called "the winter". The winter comes every 50 or 60 years. The last winter was the WW2, and the previous to the last one was Spanish-American war. The winter comes when an economy loses the target of investment due to the excess supply of already developed technologies. The excess population, i.e. the excess labour supply, is also the cause of the winter. In order to keep investing to artificially stimulate the market multiplier to activate an economy and to prevent the excess labour supply, a war occurs. Provoking a war is the best way to encourage the investment to capital and increase the labour demand. However, as our great Adam Smith, the father of economics, mentioned, war, i.e. the investment to the defence, would never encourage rise in productivity.

This is mainly fault of countries (or any sort of economic region) which have failed to make their economic policy functional enough to avoid the harsh winter. War occurs to clear this failure. War should not occur due to the fact that war reduces the sum of utility in society because of the distress caused by death of members of families, close friends, and significant others, and loss of properties. However, as human-beings and their society are not perfectly rational enough to perfectly function their economy in a perfectly rational way the failure tends to be inevitably made.

Nowadays, due to the situation that nuclear weapons exist, the war whose impact is enough overcome the winter will not occur because this sort of war will induces destruction of the entire globe. Some individuals claim that the "War on Terror" is the war taking place due to the current winter situation. But, this "War on Terror" does not seem to be big enough to reduce the excess labour supply in the globe and to artificially encourage the market multiplier.

Emile Durkheim may explain this situation. According to Durkheim, the current post-industrialised society is less altruistic and less fatalistic than the traditional society. However, the current post-industrialised society is more anomie. In the anomie, many people tend to become psychologically pathetic due to loss of their direction to live.

I guess that the death of many people may occur due to an increase in suiside caused by psychological pathology instead of the war.

The UK coalition gov't eventually need to either increase the national debt beyond Maastrict treaty's restriction or increase the tax again

2010-05-14T03:52:00.000-07:00

Well, I partially agree with your comment, my friend. But, speaking of the tax plan, it seems to be a "discrete" fiscal plan rather than a "permanent". During recession or recovering periods, they offer a temporary tax cut, but it sounds like going up again.

The coalition will have a dlilema about it. In terms of my prediction, as long as Britain is stick to Maastricht treaty, her economy hardly recovers.

Although I disagreed with Labour and Gordon Brown, the national debt should have been incured more before the recovery was ensured (without increasing tax which Labour and Gordon Brown insisted on 'cos of the restriction on incuring debt by Maastricht treaty) rather than introducing a temporary tax cut which concerns with the problem of Ricardian-equivalence (People already know the tax will rise in the near future so an effect of temporary tax cut won't work as much as the policy expects).

The first 10,000 quid you earn free of tax itself is fine. But, it does not seem to be effective enough when the total recovery from the recession caused by what the former gov't party Labour created!

I do usually not agree with incuring an extra national debt for a temporary recession, but the currently going recession shall be called the "depression" caused by the artificial economic boom plotted by Labour. The coalition gov't eventually need to either increase the national debt beyond Maastrict treaty's restriction or increase the tax again...

I do not put this comment to contradict you, but this is my worry about British politics for the moment, and I wish some gentlemen like you may listen to it...

Econometric Analysis of Employment Rate based on New Economic Geography theory

2010-05-13T12:40:00.000-07:00

Abstract:

This project attempted to create the model to indicate the significant factors influencing the employment rate in countries. As the author was sceptical about the traditional macroeconomic concepts the new economic geography theory approach is used. European countries are assessed in this project as Europe has a flexible labour mobility and is more convenient to assess the impact of language speaking ability in labour market than the USA where majority of people speak English. The Employment Rate Index (ERI), the index of employment, was based on the exponential of the employment rate subtracting the minimum employment rate in the data and then multiplied with 10 in order to make a symmetric variable (The raw data for the employment rate was very asymmetric). There are two explanatory variables are used; one indicates the employment opportunity in the other countries, and the other indicates the advantage to speak English in trade in both with other countries and within a country. Generalised Least Squares (GLS) estimates showed these two variables are significant enough to explain about the employment rate in a country.

1. Introduction:

This research was carried out to investigate to explain how the employment rate changes in terms of the New Economic Geography theory approach.

2. The reason why the data sets in European countries are used:

Europe has a flexible labour mobility as same as the USA unlike Asia and South America where people rarely change their job in their life. Europe is more convenient to assess the impact of language speaking ability in labour market than the USA where majority of people speak English. The global research encounters with lack of data set for the employment rate figure.

3. The Simultaneous Equation Problem in the traditional Macroeconomic theories:

The traditional macroeconomic theories claim that the employment rate is negatively correlated with the real wage. However, this assumption encounters with the simultaneous equation problem. The real wage rate is highly affected by the employment rate itself. For example, when the employment rate decreases, the real wage starts being depreciated in order to encourage employers to employ labour more. A part of Keynesian wage theory claims that when the employment rate decreases, the nominal wage should increase in order to encourage employees to work more.

4. The significance of using Geographic data:

The best variable explaining the unemployment rate is considered as the Gross Domestic Product (GDP). There is a high demand for productions when the GDP rises so that the demand for labour rises whilst there is a low demand for productions when the GDP falls so that the demand for labour falls. Nonetheless, John Maynard Keynes (1936) claimed that the productivity and the demand of labour is not always positively correlated. When the productivity rises, the production method can alter the labour incentive to the capital incentive. In addition, whenever the employment rate (or any variable representing it) is regressed on the GDP, it causes the endogeneity problem. Therefore, the GDP hardly becomes the best explanatory variable.

Alternatively, geographical aspects are recommended to be used as explanatory variables. Any variables used in economics tend to be measured by a common measure such as money. All variables introduced in IS-LM model are correlated each other. For example, the investment rate, the consumption rate, and the money supply are highly correlated with the productivity, and the productivity is highly correlated with these variables as well. On the other hand, the variables representing geographical aspects are not affected by any economic data generally speaking although these geographic data may affect the economic data. For instance, the geographic distance between cities and latitude (not used in this project but commonly used in the NEG theory) are not modified by any social scientific data sets.

Instead of analysing by the real wage effect inside the countries, the real wage effect in outside the countries is used to analyse the employment rate. Focusing on the graph below, rise in the real wage implies either decrease in the labour supply or increase in the labour demand. When the labour supply decreases in a country, there is a lack of labour supply or labourers in this countries are reluctant to work anymore. Therefore, there is more employment potential for immigrant labourers from outside this country. When the labour demand increases in a country, there is also more employment potential for immigrant labourers from outside this country. By contrast, fall in the real wage implies the opposite effect to the rise in the real wage by referring to the graph below.

This project used the matrix algebra (Explained in Chapter 6) to explain the employment potential in the other countries. The variable representing this is called the Wage Potential Index (WPI) in this project. In order to show this potential, the minimum distance between capital cities is used. As the countries are closer each other the effect of the real wage on employment in a country is stronger whilst as the countries are farer each other the effect of the real wage on employment in a country is weaker. The matrix algebra enables to asses this effect of all the countries surrounding the country assessed by this analysis simultaneously.

5. Shared Language provides more employment opportunities

The NEG theory also uses a variable (variables) representing the human capital index (indices). This project focused on the effect of shared language in both an domestic and international trade. For both non-skilled and skilled workers, language skill is necessary to find a job opportunity. This project focused on English as it is the most commonly used shared language as a shared language in international academic and business activities. As many people speak English in a country, people there find more employment opportunities in the other countries trading with this country. As both a country and the other country trading with have more people speaking English it is more convenient to trade each other.

6. Formulae used:

* The Annual Inflation Rates are the average of the five years.

7. Regression Analysis:

The time periods used are 1995, 2000, and 2005. The countries used are United Kingdom, Ireland, Netherlands, Belgium, Luxembourg, France, Switzerland, Spain, Portugal, Germany, Austria, Czech Republic, Slovak Republic, Italy, Malta, Slovenia, Greece, Cyprus, Finland, Sweden, Norway, Denmark, and Iceland. The reason why the number of time periods and countries is restricted is due to the lack of data sets in some other countries not introduced in this project. But, the author's previously carried out research on the real GDP per capita in a global data showed it did not make a difference between using all countries in a globe and using some representative of the economic regions in a globe. Therefore, the author was confident enough to use the data set able to use as much as possible to analyse the employment in this project.

The Generalised Least Squares (GLS) was used because one of the explanatory variable, the LPI, does not vary across the time (The author could not find a data for this varying across the time), the fixed-effect estimator based the Ordinary Least Squares (OLS) could not be used due to the multicollinearity between the dummy variables used in the OLS and the variable not varying across the time. The pooled OLS should not be used as the unit specific effect in the countries is significant. There is a certain level of the employment rate fixed over the time period. Therefore, the unit specific effect is included in the dummy variable "inside the error term". The regression result is as follows:

Both the WPI and the LPI are significant and positively correlated. The Breusch-Pagan test indicates that the random effect estimate based on the GLS should be used, and the Pooled OLS is not appropriate to use. The Hausman test indicates that the hypothesis claiming there is not an endogeneity problem cannot be rejected. According to what this table shows, the GLS estimates are essential to do this regression, and there is not an endogeneity problem so that this regression analysis is consistent.

8. Conclution:

Having analysed the employment rate, the real wage in the other countries, which represents the potential for labourers in one country to be employed, the geographical figures (the geographical distance represented in this project), and learning English are significant factors influencing the employment rate. This project proved that the NEG theory is able to explain the employment rate in labour market.

Data Sources:
Gleditsch and Ward (2001) Minimum Distance Data // Kristian Skrede Gleditsch
http://pwt.econ.upenn.edu/php_site/pwt_index.php
http://www.imf.org/external/pubs/ft/weo/2010/01/weodata/weoselgr.aspx
http://en.wikipedia.org/wiki/List_of_countries_by_English-speaking_population

The reason why Greece and Spain are in the Eurozone

2010-05-01T07:43:00.000-07:00

The Eurozone, which is also called the European Monetary Union (EMU), was created in order to stimulate trade among European countries. Some advanced countries, such as the UK, and many Scandinavian countries did not choose to join the EMU because of the disharmony in their business cycle with the Eurozone economy. When there is a disharmony among the monetary union members, sharing a common currency disturbs all economies in the monetary union. As there has already been a frequent trade between nations, these nations benefit more from sharing a common currency because they are able to avoid the price uncertainty caused by the exchange rate mechanism. However, if there is not a frequent trade between nations, although sharing a common currency may increase a trade between them, it is rather a disadvantage because it disables setting their own interest rate and the volume of money supply.

Some new members from the Eastern Europe, the former communist nations, have not fulfilled the conditions to be a part of the EMU. In order to join the EMU, the fiscal structure has to be organised in order to reduce the risk of increasing the national debt and the price inflation caused by the Seigniorage effect (increasing money supply to pay for the government budget deficit). They are required to balance their budget balance without relying on the national debt and the Seigniorage effect in order to harmonise their business cycle to the Eurozone economy.

Nevertheless, there is a question arising from the current crisis caused by the negative systemic shock caused by the world financial crisis. The crisis in Greece became permanent. Greece is a typical country which has been relying on filling her budget deficit by the national debt and the Seigniorage effect due to the poorly organised fiscal structure (though it is mainly caused by her geographic nature).

As a matter of fact, Greece has never been ready to join the monetary union. Greece has had a large proportion of the international trade partners from outside the EU on the top of their fiscal structure. Therefore, joining the EMU was a disadvantage rather than an advantage. Nonetheless, the EU accepted Greece to join the EMU although the EU hardly accepts many Eastern European countries whose level of the economic structural problem is the same as or slightly less than the Greek one.

This reason shall be political rather than economical. As same as German Third Empire led by Adolf Hitler thought of Ancient Greece as an origine of European civilisation so that they claimed that German was highly influenced by Ancient Greece as well. Both Germany Third Empire and the EU seem to seek Greece as their "holy-land" as the origine of their civilisation. Therefore, including Greece into their political peer group may prove that their peer political group has a long history.

On the other hand, Spain has had an economical advantage to join the EMU unlike Greece. Spain has a large proportion of the international trade with the EU nations. For example, the investment into Spanish property market by North Western European nations is vital. Spanish tourist industry is her prominent export business. There is a significant demand for Spanish tourist from the European nations.

However, the problem of Spain for joining the EMU is a disharmony of the business cycle between Spain and the rest of the Eurozone countries. Spanish economy excessively expanded so that the positive output gap was excessively big. This factor perpetuated the negative affect of the world economic crisis. When the positive output gap has been expanded so much, as the economy started to go into the downturn the speed of decline becomes too fast. Therefore, it is easier for Spainish business cycle to result in the hard-landing so that it ends up with creating the huge negative output gap. This dramatic change would have been able to be avoided if Spain had had an autonomy in controlling their fiscal policy, especially for her national debt, and the monetary policy (the interest rate and the money supply).