tenuous at best

Australians might just be the luckiest group in the world. A casual glance across our economic indicators we would seemingly be in pretty good shape. But there is something troubling me. It has been for a while. Walking around the streets of Melbourne I get the impression that something is amiss. That perhaps there is a certain amount of rancour from the ostentatiously meek that seems out of place. To illustrate this concern I must take you on a short journey back in time...

In Christmas 2003 I travelled to East Timor for a holiday. The customs officer at Darwin airport laughed at my departure card when I ticked holiday. "An odd place for a holidayyyy" he said. Dili at the time was under UN occupation. The streets were clogged with UN vehicles. UN choppers buzzed over head constantly. I spent the first few days wandering around Dili. I checked out the main street (a bank, a few clothes and pirated dvd shops). I went down to the beach and hung around the run down guest house where I was staying.

After a few days I made friends with a Timorese guy named Domingos who worked for the UNHCR. I met him through Rajud who was staying at the same guest house. He was working as a consultant to help write health legislation for the freshly minted East Timorese government. After hanging out with Domingos for a couple of days he asked if I wanted to come on a road trip to the West Timor border. They had to go to the border to receive some former militia members and resettle them in their villages. I said "yeah sounds like fun!" The West Timor border region was still quite unstable at this point in time. It was patrolled by the Australian army and there were regular incursions by the militias. I went in Domingos' Toyota Land Cruiser with a guy from the IOM and we were escorted by two UN police officers in another car. The handover was taking place on the border near the town of Balibo. The town was made infamous because of the murder of 5 Australian journalists in 1975 by the Indonesian military. We took the coast road towards the border. It reminded me of the Great Ocean Road in Victoria but without the safety barriers and it's barely a lane wide. Occasionally the road cuts inland and through villages. As we slowed down for a couple of emaciated cows crossing the road I said to Domingos "it's really sad the amount of poverty". He turned to me proud but maybe slightly insulted "it's not sad", he replied, "we have enough to eat; enough to drink and we are free. Why do we need anything else when we are happy?"

I didn't have an answer for him and I still don't.

After more winding coast roads the convoy cut back in towards some more villages. I noticed something that I hadn't notice before. Everyone is happy. Everyone is smiling. I walk around Melbourne and I can sometimes go a full day without seeing a genuine smile from somebody in the street. If we are so lucky and so prosperous why are we not outwardly happy? Why are we so reluctant to admit our own prosperity lest we give of ourselves? We won't admit our own happiness and our luck to be alive in the world. We won't give life itself the satisfaction.

Restricting liquor licences is not the panacea for eliminating alcohol related violence.
In 1958 Dwight Heath, a Yale graduate student, published an article on drinking patterns of the Camba people in Bolivia. The Camba people drank far more alcohol than most people yet their society was free of all the other failings that Australia would associate with excessive alcohol consumption. The Camba would drink 178-proof(89%) ethanol produced form local sugar plantations. Most drinking happened on weekends or holidays and would follow a tight ritual. Drunkenness was a placid affair; people would pass out and then casually re-join the drinking. Aggression, be it verbal, physical, sexual or otherwise was non-existent.
Also in the 50’s the Yale Centre of Alcohol Studies was seeing an interesting trend in admissions to the alcohol treatment clinic. They noticed that members of the Italian-American community were admitted in much smaller numbers as compared to the Irish-American community. This was despite the alcohol consumption in both communities being at about the same level. Mark Keller from the Centre wrote “That drinking must precede alcoholism is obvious. Equally obvious, but not always sufficiently considered, is the fact that drinking is not necessarily followed by alcoholism.” From further research they were able to determine that the Italian-Americans , like the Camba, followed a strict social structure around drinking and that this social structure broke down in 3^rd and 4^th generation Italian-Americans who were then drinking like everyone else.
Anthropologists Craig MacAndrew and Robert B. Edgerton once wrote “Persons learn about drunkenness what their societies import to them, and comporting themselves in consonance with these understandings, they become living confirmations of their society’s teachings.” Somehow our society has created this problem and it’s not from the accessibility of alcohol. I’m only speculating, I may be right or wrong, but I believe these behaviours are re-enforced by the partner choice preferences of low socioeconomic females who reward aggression and violence.
Drinking occasions: comparative perspectives on alcohol and culture By Dwight B. Heath
Drinking Games: http://archives.newyorker.com/?i=2010-02-15#folio=070

Another interesting article on the shakeup (or shakedown) of modern economic theory. It's blindingly obvious in hindsight. The concept that the market will always settle on a fair price is based on the assumption there is always a buyer willing to buy and seller willing to sell. When individuals are too scared to participate in the market then the market collapses. This is partially the reason why the stock exchanges/regulators have been turning a blind eye to apparent market manipulation by quant trading applications. The quants are providing the market with liquidity. Computers don't get spooked; people do.

Interesting piece by Laurence Grafstein at the New Republic. He is echoing the issues that I pointed out in my earlier post on bailing out companies who have taken irresponsible risks.

http://www.tnr.com/article/economy/the-real-banker-boondoggle

Interesting review over at The Economist on the economics of football in the UK. A curious finding that fans aren't as loyal as you would think. "The authors calculate the average proportion of English fans who are sure to watch their club next season: about half. People move to other towns. They have families. They reward success and shun failure." I'd say this would be a random sample of all people who consider themselves fans of a club; even if it’s a passing interest. I wouldn't think "die-hard" fans (as The Economist insists) would have a large switching propensity.

Another finding that I have always wondered about; are the large transfer fees worth it? “A third myth is that clubs cannot buy success. They can, so long as they spend on players’ wages rather than on transfers. Almost 90% of the variation in the positions of leading English teams is explained by wage bills. Transfer fees contribute little.”

I think this is also true of large transfer payments for employees in other companies. Like paying for high performing traders.

“Citi CEO Vikram Pandit, of all people, should know that committing huge sums of shareholders' capital to retain the services of a hot trader doesn't always pay off. In the spring of 2007, Citi spent close to $800 million to acquire the hedge fund Old Lane. Essentially, Citi was paying for the privilege of employing its founders, who had racked up impressive results. A year later, after the fund suffered losses, Citi basically folded it. One of the co-founders of the hedge fund was Vikram Pandit.”

Debate around the proposed system on carbon trading has centred on what concessions the political parties can be extract, rather than the real question; what benefit would such a system bring? In reality, a cap-and-trade system brings very little benefit at a very high cost. According to research conducted by the Copenhagen Consensus (a group of the world's leading climate economists) we would only reduce temperatures by 0.3 degrees by the end of the century from $800 billion worth of spending. For such a large investment the overall good is minimal. The Copenhagen Consensus' estimates for every dollar spent only 90 cents of benefit is realised. This is if the money is used in the most efficient way possible which is unlikely to be the case. If you take the EU's lead the realised benefit is in the 3 to 4 cent mark.

A much more responsible approach would be to take the money and invest it in the development of alternate energy sources. From the same research, it is estimated that investment in R&D would have a return of $16 for every dollar spent. Alternative fuel sources would also realise benefits far sooner than any carbon trading scheme. The only benefit of carbon offset credits at a consumer level is an increase in a fuzzy feeling as you believe you have done something for the environment. At a business level companies can continue to pollute guilt free. In reality the benefits such a system are tenuous at best.

We know the planet is warming. Do we want to take an extremely expensive path of carbon trading for little benefit or take the responsible path of low carbon and high-income from alternate energy R&D?

You know that intense rush you get when you first fall in love? It's actually the ventra tegmental flooding the caudate with dopamine. Funnily enough this is same system that activates when someone takes cocaine.

There have been a few recent developments that have started to shed some light on how and why humans (unlike most other mammals) love. According to Dr. Lucy Brown at Albert Einstein College of Medicine in New York different areas of the brain activate when someone is in love and when they lust. When in love Dr Brown suggests that the caudate area of the brain becomes active. This area is usually associated with cravings. When someone lusts the hypothalamus and amygdala areas of the brain activate. The hypothalamus is the area of the brain that controls hunger and thirst and the amygdale controls arousal. Further down the line, the feelings of love start to merge as the increased levels of dopamine produce more testosterone which leads to feelings of lust.

There you have it! Please kids, stay in school and don't use love; it's only for criminal defence lawyers and music producers!

 

A couple of articles that touch on this research.

This one goes into the differences between the male and female brain and why from an evolutionary perspective we love (males: spreading the seed; females: security when females had to roam the planes of Africa with a baby).

http://edition.cnn.com/2007/HEALTH/02/14/love.science/index.html

This is quite a good gonzo story on the topic. The author is trying to find out if he loves his wife:

http://www.esquire.com/features/mri-of-love-b0609