Politician and business

Politician's business is one of the hot issue in this election (nope, I havent get around to write about neo-liberalism...maybe not enough market incentive)

Does politics and business mix well together? They could, but the possible downside is also quite severe.

To forbid businessman to go into politics is as mistaken as to allow politician take advantage of state apparatus for their own private benefit. Some middle path is required.

I took cue to practice in some developed country and proposed a blind trust where a politician's money is invest without him knowing where it is put to avoid conflict of interest.

More on this link

Neoliberalism and law formulation

Megawati recently made these written statement:

"Kejadian yang dialami oleh Prita merupakan bukti kasat mata, dampak dari neoliberalisme, di mana kekuatan pasar bebas dengan lembaga-lembaga multinasionalnya dapat dengan mudah menggunakan hukum seperti UU 11/2008 tentang Informasi Transaksi Elektronik (ITE)"

Despite much sloganism inside and citicism to it, would Indonesia would be better off if all the legal product is evaluated publicly whether it will benefit corporation more than commom citizen. Even more so if it is done by an independent body with competent people on it.

Let the debate continue.

The war of slogans

The election fever is reaching new height with labelling effort to box the opponents.

I'd like to know more concrete policy and the number of each presidential candidate instead of empty slogans and the race to steal narrative.

Indonesian deserve a real and substantive debate on economic policy in order to make an informed choice.

Anyone know the website of economic platform of each candidates?

Financial crisis & behavioral economics

TNR pubilish an article (click here) by Akerlof (Berkeley-Nobel Prize Winner) and Shiller (Yale). The title is provocative "Our New Theory of Macroeconomics' and very powerful excerpts below:

"The role of irrational behavior in the macroeconomy is not trivial and obvious to see. It requires the development of a new theory, which we only just have begun to provide in our book. In this book we strove to put together an array of evidence, some of it from psychology, some of it from economic research, that gave an overall picture that we think is in stark contrast to the usual paradigm.

It is a picture that stresses factors that are totally absent from conventional macroeconomic theorizing: that the economy is affected by variations in the level of trust, by storytelling and human interest, by perceptions of corruption or unfairness, by anger and optimism, by social epidemics causing changes in gut instincts and feelings. Those factors, we firmly believe, are ultimate causes of the boom we saw a few years ago, and the bust we are seeing now".

respond to Posner's (Chicago) review (click here) of their book "Animal Spirit.

Seem like a worthy book to read. And a call to arms for behavioral macroeconomist.

Update: more book reviews on origin of financial crisis (click here)

Election conduct and election system

So many interesting things happened during this election, sometime hard to choose which one to focus on.

Should it be the meteoric rise of Democrat Party? or the plot within plot of coalition? or the disenfrachised voter by KPU incompetence?

But they all have been covered rather extensively. and so little coverage has been given to systemic analysis of election system. District system has many advantages that is sorely needed in a large and plural country like Indonesia. Thus I argued (click here)

Econoland

The Economist has a graphic, and hilarious, description on the global state of economy. Among the thrilling experiences Econoland will offer are:

The currency high-roller: Float like a butterfly with the euro and drop like a stone with the pound! Chamber of horrors: Tremble at the wailing of distressed debt! Fiscal fantasyland: Watch the economy shrivel before your very eyes as you struggle to stop growth falling! Bankrupt Britain: Pit your wits against the government as you try to sink sterling and bring the country to its knees! The Severe Contest: Try your strength against a bear market!

Click here to see it.

Economist and Election

The economist magazine have an interesting article about Indonesian election (click here)

and Nurkholisoh, an old time friend, publish a splendid article on the Economics of Election (click here)

I am also still optimist on Indonesian democracy eventhough acknowledge there likely to be many, avoidable, glitches in this election... May the journey continue smoothly.

update:
Another excellent article (click here) on the Economist on Indonesia election

Show off to buy less

Earth hour is a very interesting experiment. It turn the bandwagon effect upside down.

The standard bandwagon effect is to display consumption so peer pressure lead more people to consume similar item. It worked especially well on luxury and branded items.

But enviromental concern could also be treated as luxurious consumption item and peer pressure could be used in many ways. Slimming down and going to the gym is one example where it work to reduce consumption of high-fat substance.

The number is quite encouraging. Just in Chicago area it save 100 megawats of electricity (click here). Anyone has corresponding number for Indonesia?

Prabowonomics?

Have been reading some opinion article on Prabowonomics.

Among them are Teguh Dartanto in Koran Tempo, Bersihar Lubis in Medan Bisnis, Heri in his blog dan Vivanews feature.

Does it really deserve a school of thought by itself?

The strands of policy seems to have emphasis on role of the state and primary sector, with a healthy dose of scepticism to globalisation. Dartanto put forward a thoughful critics of some of its target.

Name-nomics is a good cacthphrase in the time of frenzy campaign. So I am looking forward to read more of SBY-nomics and Megawati-nomics as well as JK-nomics.

It would be interesting to have more debate on economic platform of each party though and less musical campaign.

Even though also quite likely that Indonesian campaign promises are, in Ron Ziegler's immortal argot, "inoperative" on the day after the election.

Mother Nature's Wrath or Government Negligence?

Almost one hundred people dies and more than one hundred still missing in Situ Gintung tragedy.

It is a shock indeed. Especially since I live nearby.

Is it mother nature striking back due to lack of water absorbance or negligence by government? I think its a little bit of both.

Checking the bottom of dam is not a high priority in budget allocation. But maybe it should.

The incentive is heavy on building new infrastruture but much less on maintenance.

Deepest condolescent for many lost of life and livelihood