Minggu, 07 November 2010
The change in time today reminds me of one of the many things I learned from William Cronon's Nature's Metropolis
Until the railroads came to prairie towns after the Civil War, each town set its clock using the sun. It was impossible to run railroads under such circumstances, and so railroads developed "standard time zones," for the United States. They became the standard well before they were codified into law.
Rabu, 03 November 2010
I comfort myself with the opening of Adam Smith's Theory of Moral Sentiments
How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it. Of this kind is pity or compassion, the emotion which we feel for the misery of others, when we either see it, or are made to conceive it in a very lively manner. That we often derive sorrow from the sorrow of others, is a matter of fact too obvious to require any instances to prove it; for this sentiment, like all the other original passions of human nature, is by no means confined to the virtuous and humane, though they perhaps may feel it with the most exquisite sensibility. The greatest ruffian, the most hardened violator of the laws of society, is not altogether without it.
Senin, 01 November 2010
I have started a classical music blog
It is here:
http://richardsmusicblog.blogspot.com/
This is just fun for me--we will see how it works.
http://richardsmusicblog.blogspot.com/
This is just fun for me--we will see how it works.
Please make it stop
A friend of mine posts a query to my Facebook Wall:
The three terms in which GDP grew fastest: FDR III, FDR I and FDR II. Even if one removes III because of the special circumstance of World War II, he still gets the best two four year periods. Do people really want to argue the counterfactual? [BTW, #4 is Truman II, and # 5 is JFK-LBJ].
I was listening to an Economist this AM on the radio [who is] part of a group of Economists who believe FDR's policies prolonged the Depression, rather than helped it. This goes against everything I learned in my vast High School and Community College experience. What's the real deal, Green?Just to make sure, I calculated four year GDP growth by presidential term, going back to Hoover. I count as a term as the period from inauguration to inauguration, so 1929-1933, 1933-1937, etc.
The three terms in which GDP grew fastest: FDR III, FDR I and FDR II. Even if one removes III because of the special circumstance of World War II, he still gets the best two four year periods. Do people really want to argue the counterfactual? [BTW, #4 is Truman II, and # 5 is JFK-LBJ].
On the theme of personal responsibility
Investors in second (and third, fourth, fifth...) lien mortgages knew that they were subordinate to first liens. Such investors bet that the higher rates paid to such mortgages more than compensated for taking a first loss position. They bet wrong.
People in a position to know such things tell me that one of the impediments to private renegotiation of first lien mortgages is second lien mortgage investors. If there is a place we could use a reckoning, it would be a recognition that such liens have been wiped out.
People in a position to know such things tell me that one of the impediments to private renegotiation of first lien mortgages is second lien mortgage investors. If there is a place we could use a reckoning, it would be a recognition that such liens have been wiped out.
Should everyone get debt relief?
Paul Krugman in his column this morning argues that debt relief is crucial to economic recovery. I think he is basically right, but it is not clear to me to whom he would extend debt relief. If we don't draw any distinctions between those who actively put themselves in trouble and those who are victims of circumstances beyond their control, we will leave the whole concept of the responsibility to repay debt in tatters. Even if we don't care about the moral implications of this, we should care that if we do blanket discharges of debt, it will be much harder for consumers to obtain debt in the future.
With this is mind, we should probably draw distinctions among different types of borrowers. Here is a rough ranking of borrowers in some sort of difficulty from most to least culpable for their misfortunes:
(1) Those who committed fraud: for example, those who willfully overstated their income on a loan application.
(2) Speculators who put little or no money down on a house, and then walked the instant house prices fell.
(3) Borrowers who used cash-out refinances or second liens to buy stuff--vacations, televisions, boats, etc. Michael Lacour-Little estimates that about half of underwater borrowers in Southern California took equity out of their houses.
(4) Borrowers who used cash-out refinances or second liens to pay for education or health care. Am I drawing a distinction between (3) and (4)? Yes.
(5) Borrowers who had adequate income to repay their purchase money mortgage, did not take money out of their house, lost a job (or took a serious pay cut), and are underwater.
(6) Borrowers who are current on their mortgages and are underwater. People in buckets (5) and (6) may well be equally responsible; people in (6) may have just gotten a better draw.
As a policy matter, I cannot see providing debt relief to (1)-(3). While I agree with Krugman that we cannot let worries about moral hazard prevent us from engaging in all debt relief, we cannot just ignore moral hazard altogether. The tough part, from a policy perspective, is distinguishing between (3) and (4). I am not sure how we do that, but it is worth thinking about.
As for (5) and (6), at minimum we could allow such borrowers to refinance into today's low interest rates without any fuss: this would both lower payments and the present value of the mortgage, and hence reduce the amount by which people are under water on a mark-to-market basis.
If I had my druthers, people in (5) would be offered a debt equity swap, where the amount owed (the bond) would be reduced, but a large share of any future profit would be shared with the lender. The Wisconsin Foreclosure and Debt Relief Plan is also worth considering.
Those who were treated fraudulently by lenders (particularly those who had equity stripped via fees) are in another group altogether, and deserve relief. I am not sure what the correct policy lever is for delivering it.
With this is mind, we should probably draw distinctions among different types of borrowers. Here is a rough ranking of borrowers in some sort of difficulty from most to least culpable for their misfortunes:
(1) Those who committed fraud: for example, those who willfully overstated their income on a loan application.
(2) Speculators who put little or no money down on a house, and then walked the instant house prices fell.
(3) Borrowers who used cash-out refinances or second liens to buy stuff--vacations, televisions, boats, etc. Michael Lacour-Little estimates that about half of underwater borrowers in Southern California took equity out of their houses.
(4) Borrowers who used cash-out refinances or second liens to pay for education or health care. Am I drawing a distinction between (3) and (4)? Yes.
(5) Borrowers who had adequate income to repay their purchase money mortgage, did not take money out of their house, lost a job (or took a serious pay cut), and are underwater.
(6) Borrowers who are current on their mortgages and are underwater. People in buckets (5) and (6) may well be equally responsible; people in (6) may have just gotten a better draw.
As a policy matter, I cannot see providing debt relief to (1)-(3). While I agree with Krugman that we cannot let worries about moral hazard prevent us from engaging in all debt relief, we cannot just ignore moral hazard altogether. The tough part, from a policy perspective, is distinguishing between (3) and (4). I am not sure how we do that, but it is worth thinking about.
As for (5) and (6), at minimum we could allow such borrowers to refinance into today's low interest rates without any fuss: this would both lower payments and the present value of the mortgage, and hence reduce the amount by which people are under water on a mark-to-market basis.
If I had my druthers, people in (5) would be offered a debt equity swap, where the amount owed (the bond) would be reduced, but a large share of any future profit would be shared with the lender. The Wisconsin Foreclosure and Debt Relief Plan is also worth considering.
Those who were treated fraudulently by lenders (particularly those who had equity stripped via fees) are in another group altogether, and deserve relief. I am not sure what the correct policy lever is for delivering it.
Where is ‘marketing’ headed from ‘social marketing concept’? ‘Customer Life Growth Monitoring Concept’ seems to offer promise!
Where is ‘marketing’ headed from ‘social marketing concept’? ‘Customer Life Growth Monitoring Concept’ seems to offer promise!
A marketer who is interested in keeping with him his customer quite longer or for ever have till now traversed many stages- from production-orientation to sales-orientation to product-orientation to marketing-orientation to social marketing orientation. The evolution of marketer’s love and protective inclination for the customer extended further to the creation of life-time customer value and co-creation. These apart, the Porter’s value chain analysis has set out to explore all possibilities of giving the best service to the customer. What is the next marketing philosophy that can guide the marketer’s efforts? Is there any space left for further exploration by the marketing scholars?
What all the previous concepts fail to capture and can do further is: can the marketer monitor the growth ladder of the customer’s life and the corresponding upgrading of the customer to the next life stage in terms of what the marketer’s next product category can offer a customer. For example, an automobile company has sold its customer a scooter, which has later been replaced with a bike, which, in turn, later by an entry-level car, and later a medium-range car, and later, a luxury car.
The marketer’s main function of this philosophy is : take back the product first sold at its salvage value and give the upgraded version of product that new life stage of the customer requires, and later next cycle starts with a new product category as required by the growing customer. In the process, alongside of it, the customer’s network and their references are also brought into the marketer’s fold.
The main planks of the this concept are:
The customer is under eternal protective cover of the customer, which is an aggressive pursuit of customer’s life time value.
A customer’s life success growth graph is monitored for a very long period by the marketer by giving the customer’s product upgrades for ever.
His ramshackle clunkers are taken care of the marketer.
His network of relations are also tracked to bring them into the marketer’s fold.
Research scholars are challenged to take this further and establish its value for the marketer.
A marketer who is interested in keeping with him his customer quite longer or for ever have till now traversed many stages- from production-orientation to sales-orientation to product-orientation to marketing-orientation to social marketing orientation. The evolution of marketer’s love and protective inclination for the customer extended further to the creation of life-time customer value and co-creation. These apart, the Porter’s value chain analysis has set out to explore all possibilities of giving the best service to the customer. What is the next marketing philosophy that can guide the marketer’s efforts? Is there any space left for further exploration by the marketing scholars?
What all the previous concepts fail to capture and can do further is: can the marketer monitor the growth ladder of the customer’s life and the corresponding upgrading of the customer to the next life stage in terms of what the marketer’s next product category can offer a customer. For example, an automobile company has sold its customer a scooter, which has later been replaced with a bike, which, in turn, later by an entry-level car, and later a medium-range car, and later, a luxury car.
The marketer’s main function of this philosophy is : take back the product first sold at its salvage value and give the upgraded version of product that new life stage of the customer requires, and later next cycle starts with a new product category as required by the growing customer. In the process, alongside of it, the customer’s network and their references are also brought into the marketer’s fold.
The main planks of the this concept are:
The customer is under eternal protective cover of the customer, which is an aggressive pursuit of customer’s life time value.
A customer’s life success growth graph is monitored for a very long period by the marketer by giving the customer’s product upgrades for ever.
His ramshackle clunkers are taken care of the marketer.
His network of relations are also tracked to bring them into the marketer’s fold.
Research scholars are challenged to take this further and establish its value for the marketer.
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