the __earthinc

After all the hype, it was as dull as The Phantom Menace.

Metblogs KL has more (please do not take it too seriously).

Naked cylon!

Kesesakan lalu lintas adalah satu kebiasaan bagi Lebuhraya Persekutuan. Kehadiran pemandu-pemandu yang tidak sopan yang sentiasa memotong barisan juga tidak asing. Tambahan lagi, Jumaat semalam bagi saya merupakan satu hari yang dipenuhi dengan permintaan yang tidak munasabah langsung. Mujurlah ada radio sebagai teman yang sentiasa cuba mengalihkan perhatian saya daripada sumber-sumber yang menimbulkan kemarahan. Di radio terpasang frekuensi 93.9FM. Radio 24 yang dikendalikan oleh Bernama sedang menimbangi pandangan orang ramai tentang cara mengatasi kos sara diri yang meningkat dan salah seorang yang berkongsi pendapat berjaya menghiburkan hati saya yang gelisah.

Pengacara bertanya, “Ya, bagaimanakah encik mengatasi peningkatan harga-harga makanan serta minyak?”

Dengan yakinnya, dia menjawab, “Kita mesti kembali kepada agama.”

Sebelum ini, ada pandangan-pandangan yang boleh diterima pakai. Seorang penelefon berkata rakyat tidak perlu panik dan patut terus berbelanja untuk menjana ekonomi negara semasa kesihatan ekonomi terancam. Seorang penyokong Keynesianisme, mungkin.

Ada yang berpendapat yang inilah masanya untuk kita melipat-gandakan usaha untuk menambahkan pendapatan. Seorang lagi menyaran supaya rakyat meneliti perbelanjaan seharian dengan menyediakan bajet tahunan. Perbelanjaan yang kurang penting haruslah dipotong.

Boleh dikatakan rata-rata, kebanyakan pendapat yang dikongsi biasa didengari, kecuali apabila agama ditawarkan sebagai ubat kepada kos sara hidup yang tinggi.

Pengacara rancangan radio itu jelas kurang berpuas hati dengan pandangan itu dan kemudiannya meminta penjelasan lanjut tentang pendapat kembali-kepada-agama.

Tanpa teragak-agak, jawapan yang diberi: “Ini semua satu cubaan daripada Allah.” Dia berasa jika kita bersungguh-sungguh yakin dengan Allah, semua masalah ini akan dapat diselesaikan.

Bagus. Teruskan berdoa tanpa melakukan apa-apa. Buatlah sembahyang hajat dan yakinlah dengan hebat yang agamalah penyelesaian kepada masalah kamu. Tuhan akan menjawab doamu! Yakinlah!

Hahaha. Komedi hari Jumaat.

The mercury is rising out there. With the Deputy Prime Minister has been accused of being linked to murder, a former Deputy Prime Minister accused of having too much fun while rumor of the announcement of emergency tomorrow, I think it is time to chill out a bit. There will be a huge gathering tomorrow. Initially supposed to bitch about greater fuel prices, Anwar Ibrahim is expected to make some big announcement. But us commoners should just let the big boys play the slugfest. We should just go up and enjoy the Sunday.

Tomorrow in front of the Kelana Jaya Stadium, let us drive our MPV, set up the grill and have a tailgate party prior to an announcement by Anwar Ibrahim that, according to a friend which heard from a trusted source which in turn was informed by the American intelligence, may set in motion a coup d’tat.

Bring a tent too. It will be hot tomorrow. Or rain. It is Malaysian weather after all. It is worse than Malaysian politics as you can imagine. In any case, you certainly will not want to miss the drama.

Forget not to marinate your chicken and beef and lamb and other edible stuff. And some turkey too, just in case we need to visit the Turkish embassy. But please, please, do not bring cat, dog or any exotic meat. Maybe some paddy chicken is alright since we expect a lot of human-sized frogs on Sunday.

And oh, if you plan to have a barbeque tomorrow, marinate your stuff today!

We could throw some balls too and play catch. And maybe, get your children to fly the flags of PKR. You know, like how they do on every football Saturday?

A coup d’tat? Sounds like a French delight, do you not think so? We must celebrate with clam chowder soup with french fries and maybe with some croissants with cheese. Haha. Instead of a civil war, we would probably go to war with the French over this. Aux armes citoyens!

And oh yes. Do not forget your “I Oppose Fuel Subsidy” banner tomorrow! Or “Change Your Lifestyle!” Or “Tian Chua for Prime Minister!”

The Kedah state government has come under criticism for its decision to log timber in its water catchment areas. While I disagree with the decision, I feel too many sides are criticizing the state government without providing any solution — with the exception of Sahabat Alam Malaysia (SAM).

Here, I want to offer two solutions to the issue that will leave those trees in peace:

SAM rightly pointed out that Penang needs to compensate Kedah for refraining from logging timber within the water catchment areas from which Penang draws its water supply. In everything that we do, there is always an opportunity cost and Kedah is no different in this respect: one of those costs involves the decision to log or not to log.

A similar idea of compensation was proposed at the United Nations Climate Change Conference held in Bali, Indonesia last year with the objective of halting the destruction of rainforests. The origin of such an idea itself goes back to 1937 when economist Ronald Coase first proposed it. I will not bore you with the economics but what I am trying to do is demonstrate that this idea is not as novel as it sounds.

While SAM gets the idea of Coase, the state-to-state compensation is not as on target as I would like it to be. It does not link the issue with the market and any state-to-state compensation may amount to a water subsidy in the end.

A better compensation method will see consumers themselves compensating the owner of the catchment area and, in this case, the owner is the Kedah state government. This is also the reason why I do not prefer the idea of having the federal government compensating Kedah. This allows the opportunity cost to be included into the water bill of Penang folk. With that, the opportunity cost faced by Kedah will be flipped and eventually provide the state with a chance to reassess its priority. Needless to say, that translates into higher charges for water consumption for Penang folk.

The beauty of this suggestion is that it also encourages water conservation. It reveals the true cost of water to consumers and allows the consumers to appreciate the problem faced by Kedah even more. It is a model for advocating more sustainable water consumption.

The second solution involves property rights. Those who wish for a guaranteed continuous clean water supply from Kedah can purchase rights over the trees or a tract of land within the catchment areas. At the right price, the Kedah state government will sell the rights to the trees and be relieved of the temptation to cut them down. This, of course, only works if the new owners do not succumb to the temptation of cutting down the trees for money.

But the two solutions somewhat digress from my original thought. What I am trying to say is this: please offer solutions. Criticism, however justified, is simply not enough.

p/s — a version of this article was first published by The Malaysian Insider.

I am in a rush but I cannot let this hour past without posting anything.

Happy Fourth of July.

I want to blog but I am too tired and too tied with work.

For story behind the picture, go to Metblogs KL.

Tony Pua (okay, okay, MP Tony Pua) raised an interesting issue in his blog. There, he expressed his approval for the build first and then sell later arrangement (build-sell) proposed by the Selangor state government in replacing sell while building arrangement (sell-build?).^[1]

While the build-sell model does have its benefits, namely having the potential of reducing the number of cases of buyers being cheated by developers, the currently popular sell-build structure does have its benefits too.

First of all, it allows individuals to purchase home at a cheap price. Developers, assuming there is no fraud involved, will be willing to sell yet to be built or completed homes at a discount to accommodate any risk undertaken by the purchasers. Furthermore, time value for money faced by the developers encourages them to accept smaller amount from purchasers here and now compared to any time in the future.

Secondly, it encourages developers to be bold and thus, encourages growth in the construction industry. This is due to convenient cash flow. If the developers had to wait for months before they could see the first cent of revenue coming in, I think a lot less developers would be willing to participate in building homes. Or at least, smaller developers would have less opportunity to do business. Small developers most likely could not withstand the large net outflow of cash they would have to suffer between the start of construction and completion date. In the end, not only the construction industry could see less growth, a build-sell world could create a world close to a monopoly in which only large developers which could withstand sustained net cash outflow until the date of completion survive. I am well aware that financial institutions are there as underwriters but then again, through what limited experience I have, banks are very risk-averse and that increases cost of doing business.

Anyway, I am ambivalent in the debate between build-sell and sell-build, if there is a debate at all. But I am certainly would be unhappy if the state decided to coerce developers into adopting a particular structure.

^[1] So when I read that the Selangor state government intends to implement the “build then sell” concept of housing, I’ll all hands in support. [Build The Sell. Philosophy Politics Economics. July 2 2008]

I tend to get excited when I see familiar things.

At the WSJ, the famed Feldstein explained why prices of crude oil are up. Among the explanation written how the decision to extract oil from the ground comes about and how it affects prices:

Unlike perishable agricultural products, oil can be stored in the ground. So when will an owner of oil reduce production or increase inventories instead of selling his oil and converting the proceeds into investible cash? A simplified answer is that he will keep the oil in the ground if its price is expected to rise faster than the interest rate that could be earned on the money obtained from selling the oil. The actual price of oil may rise faster or slower than is expected, but the decision to sell (or hold) the oil depends on the expected price rise.

There are of course considerations of risk, and of the impact of price changes on long-term consumer behavior, that complicate the oil owner’s decision – and therefore the behavior of prices. The Organization of Petroleum Exporting Countries (the OPEC cartel), with its strong pricing power, still plays a role. But the fundamental insight is that owners of oil will adjust their production and inventories until the price of oil is expected to rise at the rate of interest, appropriately adjusted for risk. If the price of oil is expected to rise faster, they’ll keep the oil in the ground. In contrast, if the price of oil is not expected to rise as fast as the rate of interest, the owners will extract more and invest the proceeds. [We Can Lower Oil Prices Now. Martin Feldstein. Wall Street Journal. July 1 2008]

This is real economics, not a hunt for scapegoats, i.e. blame the speculators.

And oh, it is familiar because that is exactly what my environmental economics professor taught me back in Ann Arbor.

Democratic presidential candidate Barack Obama promised a more active approach to faith-based social programs on Tuesday in a bid to bolster his support among evangelical and religious voters.

Obama visited a community ministry in a conservative region of the election battleground state of Ohio to unveil a plan to reinvigorate faith-based community programs first pioneered by President George W. Bush. [Obama Courts Evangelicals With Stress on Faith. Reuters via New York Times. July 1 2008]

A write-up at the BBC somehow provides a scarier picture:

A council involving religious groups would help to set the national agenda, Senator Obama said in his speech. [Obama backs faith in public life. James Coomarasamy. BBC. July 1 2008]

Is McCain taking similar stance or is it just Obama outflanking the Republican candidate?