Kenya launches universal pensions

January 21st, 2018

Beginning this month – January 2018 – every resident of Kenya over the age of 70 years is entitled to a pension funded solely by general government revenue. The pension is modest, and the age of entitlement is high, but it is an excellent beginning. Previously, only 240,000 of the 390,000 Kenyan citizens over 70 years of age received means-tested, targeted pension benefits. Targeting will continue for social pensions given to persons between the ages of 65 and 69 years. Read the rest of this entry »

the high risk of nuclear conflict

January 21st, 2018

This frightens me.

[The US, according to a draft document seen by the New York Times, is] on the point of revising its defence policy — to allow the use of nuclear weapons … in response to “attempts to destroy wide-reaching infrastructure, like a country’s power grid or communications, that would be most vulnerable to cyberweapons”. ….

[This] demonstrates how seriously the US is now taking the threat of cyber warfare; and is clearly designed to massively increase America’s deterrence capacity.

At the same time, however, the policy shift carries considerable risks. By lowering the bar to the first use of nuclear weapons, it makes nuclear war more thinkable. The dangers of such a move are increased because concerns about nuclear proliferation are mounting — with North Korea’s nuclear weapons programme making rapid progress, and both Pakistan and Russia incorporating the early use of nuclear weapons into their war-fighting plans.

Gideon Rachman, “Nuclear weapons are a risky defence against cyber attacks“, Financial Times, 19 February 2017 (gated paywall).

call for universal healthcare and pensions for India’s elderly

January 18th, 2018

We should start looking at universal health insurance for the elderly, not restricting it to merely BPL [below poverty line] patients, but extending it to the middle-class as well. We need helplines, the establishment of a national trust for the aged and a national commission for senior citizens. Sadly, as a society, we do not care for our elderly and hence the lack of will.

The government needs [also] … to help future generations benefit and live longer … with some sort of a universal pension plan.

Poonam Muttreja, “Too little done to provide elderly with social, financial security“, Deccan Chronicle, 17 January 2018.

Ms. Poonam Muttreja heads the Population Foundation of India (PFI), a New Delhi-based NGO. The Deccan Chronicle is published in Hyderabad (Telangana) and other Deccan regions, including Kerala. The newspaper has more than a million subscribers.

The BPL is supposed to identify families living in extreme poverty, but its application is very uneven, inefficient and corrupt. Many families who are poor enough to qualify are excluded, while non-poor families are often counted as poor.

Only 18% of India’s population over 60 years of age have access to a monthly social pension of 200 Rupees (3 US$), and the beneficiaries are not India’s poorest.


racial prejudice and contact with minorities

January 17th, 2018

I recall reading several studies of the US and UK that show a negative correlation between anti-immigrant prejudice and the proportion of immigrants in a community. A new study of the UK by economists from Tilburg University in The Netherlands and the University of Sydney in Australia contributes to this research, and shows that the effects are persistent. Worryingly, though, persistence is weaker in areas that received less subsequent in-migration.

Here is the authors’ conclusion: Read the rest of this entry »

billionaire Ray Dalio on income inequality

January 14th, 2018

Ray Dalio, founder of the investment firm Bridgewater Associates, last week had lunch courtesy of the Financial Times at the Jackson Hole burger bar in midtown Manhattan . In the Great Recession he “propelled his flagship fund, Pure Alpha, to gains of almost 10 per cent in 2008, at a time when most funds suffered searing losses”.

Surprisingly, the billionaire is not bullish on markets today, for political reasons. We know the world economy is in trouble when billionaires worry about unequal distribution of income and wealth. Read the rest of this entry »

Donald Trump’s path to the presidency

January 12th, 2018

[David] Frum, a former speech writer to George W Bush and one of the most articulate “Never Trumpers”, asks how a man like Trump could have reached high office in the first place. One answer is that Trump does possess real skills. Among these is an almost diabolical knack for divining other people’s resentments — perhaps because he is riddled with so many of his own. Trump often tries out different applause lines at rallies and sticks with the ones that resonate. Such market testing appears to work. He has an ability to identify with people who feel slighted. [Michael] Wolff describes how … many years ago, Trump was asked to define “white trash”. He replied: “They’re people just like me, only they’re poor.” …. Read the rest of this entry »

Against the Grain

January 10th, 2018

Yale University political scientist James C. Scott has published a fascinating, but controversial book titled Against the Grain. It is the second book by him that I have read, and I confess that it disappointed me. It is too libertarian, too biased for my taste. Not until the last chapter (seven) did his thesis become clear. Here are some brief extracts from the introduction and that final chapter where the author clearly explains his main thesis. Read the rest of this entry »

Seeing like a State

January 10th, 2018

Some years ago Yale political scientist James C. Scott published a book that I read and enjoyed very much, even though it was very libertarian, contrary to my own political philosophy. Here is an excerpt from the book that I posted years ago as a TdJ email:

The state’s goals are minimal, it may not need to know much about the society. Just as a woodsman who takes only an occasional load of firewood from a large forest need have no detailed knowledge of that forest, so a state  whose demands are confined to grabbing a few carts of grain and the odd conscript may not require a very accurate or detailed map of the society. If, however, the state is ambitious–if it wants to extract as much grain and manpower as it can, short of provoking a famine or a rebellion, if it wants to create a literate, skilled, and healthy population, if it wants everyone to speak the same language or worship the same god– then it will have to become both far more knowledgeable and far more intrusive.

James C. Scott, Seeing like a State: how certain schemes to improve the human condition have failed (Yale University Press, 1998), p. 184.

Professor Scott this year published another book that is similar, but more historical, going far back in time. A brief extract from that book follows today as a TdJ blog.

Brexit Britain and Trump’s America

January 8th, 2018

FT columnist Gideon Rachman writes that Trump’s policies and Brexit, although they initially seemed to be manifestations of similar working class unease in the the US and the UK, “are growing further apart with the passage of time”. Read the rest of this entry »

speed trading in financial markets

January 2nd, 2018

High-frequency trading (HFT) by computer replaced trades on traditional exchange floors a decade ago, and the speed of trading is fast approaching the speed of light. The increased speed of transactions makes it difficult to make money trading equities and bonds. In addition, financial markets are increasingly vulnerable to flash crashes such as the one experienced in May of 2010.

The following timeline, from a Big Read column in the Financial Times, summarizes the accelerating pace of trading since a telegraph cable was first laid beneath the English Channel in 1851. (Much of the early history is left out, including a successful transatlantic cable, laid in 1866 between England and the USA.) Read the rest of this entry »