On Google’s proposed wireless non-neutrality proposal

If you have read Google’s policy proposal for open internet you might be wondering why is Google proposing not too enforce net neutrality on wireless broadband.

Well. My hunch is that Google fears that the trend towards eliminated unlimited data planes by wireless carriers will discourage users from clicking on Google ads.
To counter this, Google will want to subsidize the cost of using bandwidth to display ads and visiting advertiser’s site on mobile devices.
This will allow the price of wireless internet to drop.
Subsidizing certain use of the bandwidth over other is against some principle of net neutrality. Hence Google’s proposal.

If this is in fact the intention, I dont see a major problem, as long as these conditions are also met:
1. carriers manipulation of wireless bandwidth are perfectly transparent (part of googles proposal).
2. neutral wireless data plans are also made available (without artificially inflated price).
3. wired broadband remain a completely neutral alternative (part of googles proposal).

We all should know by now, that so many of the “free” stuff that we enjoy are subsidize by ads, and its ok.
without ads none of the email, search, facebook, blog and news service that we take for granted will be free.
Not just the internet, TV programs, magazine and news papers are either cheap or free because they are ad supported.

The Keynesian Proposition

Over at Economist.com, they got Brad DeLong and Luigi Zingales representing Keynesianism and Neoclassical respectively over an online debate on the proposition “We are all Keynesians now.”

The proposition is awkwardly framed, i mean come’on, arguing for the proposition is like arguing that entire political and economic elites agrees over the remedy needed to recover from the current financial crisis, which is an impossible position to defend. This forced DeLong to declare defeat in the opening sentence of his opening remarks. And belatedly, moderator re-frame the debate to be “whether we—or rather, economists and policymakers—should be [Keynesian].” on the third day.

anyway, here is the problem

There are two recession dynamics at work:  (1) plummeting real estate value and consumer spending is discouraging or disabling mortgage payment, leading to piling bad debts that is spreading through the financial sector via securitization and derivatives, banks thus concentrating their capital on deleveraging and not lending to business for expansion. (2) lowering consumer spending is reacted with output contraction and increase unemployment, that further reduces spending and thus the deflationary spiral ensues.

and the Keynesian Proposition

Delong is obviously not against government intervention to get the banks to start landing again or using every possible monetary policy to stimulate the economy. What he is saying that those measures have limits. Monetary tools is already exhausted. and not without politically unacceptable amount of taxpayer’s money can government keep the banks capitalized.

Even with recapitalized banks, in the short-run, under overwhelming uncertainty and pessimism, healthy business that would have invested, will not; innovations that would been commercialize with venture capitalist‘s funding, will not; employed people would have leave their job to start a new spin-off, will not. And there are no guarantee that the money from the recapitalized banks wont just be used to fill another bubble, which is precisely what happen when federal bank pump money in response to the busting of Dot-com bubble in 2000 only to walk straight into a real estate bubble. Therefore, DeLong argues that in the absent of private investment and deteriorating consumer spending , government who can borrow cheaply has to step in to invest and spend.  DeLong also believes that government investment in public goods like infrastructure, basic research, education, broadband access in rural area can create new innovation and business opportunities that fuels economic growth in the future (off setting tax increase needed to pay government debt), and fights deflation now.

the criticism

The fear of fiscal stimulus is that it is hard to execute effectively, because government (by design is slow), wont move quick enough to start projects to deal with short-term problems. By the time government is able to initiate most of its spending, some private business that are ready to invest, will be force to compete with the government for capital (goods, service and labor). Even worst, if in a state of panic, the government is legitimized to pursuit projects that does not have benefit worthy of its cost in order to keep people employed, people will be under an illusion of job security,  and not looking for new job, retrain, or staring new entrepreneurial enterprises.

The other problem of allowing government to allocate resource is that it is often inefficient and it expands politician’s power and attract lobbyist, which by the way is already happening. Obama promised greater transparency to mitigate this problem, but even some Democrat supporter are skeptical.

Furthermore unlike isolated national economic recession, this is a global recession where US government borrowing will have an adverse effect of draining the fund other economies needs for their recovery, subsequently weakens demand for US exports that is crucial for recovery. Unfortunately, global dimension of the recession is noticeably absent from the debate.

to conclude.

If the fear of massive unemployment is that it will lead to social unrest and deflationary spiral, then the government should simply increase and extent unemployment benefit. When people’s livelihood are secure and not occupied by bogus project they will have time to fund jobs, retrain or invent the next growth inducing innovation. Government spending in public goods can be very efficient considering the low cost of everything in a recession. However as Zingales points out these these projects “should be argued on their own merits, not as a stimulus.

So, am i thinking Keynesian? I am not too sure, i mean the label Keynesian is so loaded with different meaning. I am however definitely for unemployment benefit in a recession.

more on this later.

Bob Tsao (曹興誠)’s misguided view of democratic governance

I was very impress with Bob Tsao (曹興誠)‘s cross strait peaceful coexistence act (兩岸和平共處法), however his concept of democratic governance stuns me as misguided.

In a post he wrote following KMT’s election victory gaining control over 3/4 of the legislature seats.



In a subsequent post, Tsao wrote




A commercial airplane only has a singular and clear objective of bring its passenger to an agreed destination it is therefor not an appropriate apology to a democratic government where it has multiple task to accomplish and multiple values it need to respect.
So, no matter what is the predominate task at hand, the multi member legislature whom represent various member of the society will make sure that the executive do not achieve one task while trumping other equally important tasks and values of the people. This is precisely why democratic governments operate on consensus instead of single minded decision making.

Having said that i do conceit the point that there are circumstances where professionalism need to trump democratic ideal where democratic deliverance is not a realistic option, for example during a war. We do not need democratic consultation for every military strategy, as long as the military is acting in the interest of the people in good faith. But, extreme circumstances was not what Tsao had in mind, as least thats the impression I gather from his post.

This flawed view of governance might be a common syndrome among the so called CEO statespersons – elected heads of government who came from business executive culture, America’s George Bush Jr, Thailand’s Thaksin Shinawatra, and South Korea’s Lee Myung-bak all fits this profile. In business, executive’s sole objectives is always making as much money as efficiently as possible, very straightforward. Whereas government has to provide national security without jeopardise personal freedom, respond to inflation without damping economic growth, foster industrialisation without polluting the environment. The job of the government is never straightforward. And although, shareholders do exist to provide check on the CEO via shareholder meetings and share market, they are far less powerful than the constrain on a executive in government. The difference between a business environment and government may be the factor contributing to CEO blunders in elected office.

CEO Statesperson coming into the government are more likely to be single minded, witness by Bush Jr’s obsession with war of terror. Bush was willing to lift restriction to allow wire taping US citizens without a warrant, forgo America’s stance against torture, destroy the world’s good will for America by invading Iraq and openly reject United Nations monopoly on war legitimization. CEO statspersons have limited regard for dissents and democratic oversight. Bush says people do not understand the historic significance of his policies and that he will be vindicate in time. Key members of Bush administration have refuse to attend congressional hearings or release requested paper. Firing members of his administration who openly disagree with him, admiral William Fallon, general Eric Shinseki, and attorneys in justice apartment.

I am not saying that this correlation is absolute, not every CEO statesperson will be as narrow minded as Bush, or that disregard for democratic ideal is unique to CEO statespersons. What I am saying is that more than career politicians, CEOs who have spent most of their life running successful businesses might carry memes that does not fit easily with democratic institution.

What to do about prostitution?

From Brad Plumer’s blog

The moral questions surrounding prostitution are thorny (is it ever freely chosen? is it always coercive?), so let’s set that aside and just note that criminalization creates a host of practical problems—and usually makes the sex trade more dangerous. One recent study by Steven Levitt and Sudhir Venkatesh found that many police officers rape prostitutes on a fairly regular basis, holding the threat of arrest over their heads (as do gang members offering “protection”). And, in the underground market, condoms are used only 20 percent of the time, versus the near-100 percent rate you see in legal-but-regulated Nevada brothels.

Read the rest.

I am for legalisation, regulation and provide coerced sex workers social help.
Prostitution is illegal here in Taiwan too.


Found these opeds through New York Times, insightful reads.

AS a former sex worker, I’m puzzled by what is reported to be Gov. Eliot Spitzer’s preference for the riskiest form of indoor prostitution I have ever experienced. Escort agencies are constantly being investigated, infiltrated and spied on… …someone like the governor would shop for sex through an Internet escort service is mind-boggling.

read the rest.

another oped arguing that prostitutes are victims even if they consent to renting their organ.

… most women in prostitution, including those working for escort services, have been sexually abused as children, studies show. Incest sets young women up for prostitution — by letting them know what they’re worth and what’s expected of them. Other forces that channel women into escort prostitution are economic hardship and racism.

Read the rest.

and about the legality of prostitution speculation on whether Spitzer was selectively prosecuted.

When society has effectively legalized something that is still theoretically illegal, there is always the possibility of selective prosecution—targeting individuals who are in disfavor with someone in government. Selective prosecution is tyranny, and the possibility of selective prosecution is a powerful argument for legalization of the behavior that the society has chosen to condone.

Read the rest.