Getting Good

My corporate finance class is finally getting to the good stuff.

After a month of doing what amount to math problems (for example, finding the present value of securities) we are getting to the substance: capital budgeting and raising capital. Granted, capital budgeting is also like applied math, but it's more clearly applicable in a business setting than finding the present value of a growing perpetuity. And raising capital is somehow dramatically interesting.

ah, sweet bliss

Another day of doing nothing but econ problem sets.

David Satter's talk on the Litvinenko murder

Today I saw David Satter give a talk on the Litvinenko murder. I agree with some of his points (that the FSB likely killed him, that the Kremlin's accusations that Berezovskiy and/or Nevzlin did it are opporunistic), but I also found that he jumped to conclusions regarding the Kremlin's motives for hampering the British investigation. His theory implied that the Kremlin has something to hide, but I think that their motive may be national pride. If nothing else, his assumption reminded me of the mistakes Americans made regarding WMD in Iraq. Because Saddam wouldn't let the inspectors in and he was hostile towards us, we figured he must have something to hide. Turns out that part of what officials wanted to hide (in those intercepts that Powell played for his UN speech) was irregularities in how they had disposed of weapons. Likewise, Satter's guessing at the Kremlin's motivations seemed likely to lead to neat but mistaken conclustions.

He also was too negative in his appraisal of the Kremlin. Of course the Kremlin does many things that I condemn, but I don't think the leadership is there solely to abuse the population. I find it hard to respect anyone who can't say anything positive about the Kremlin as a real scholar of Russian politics. How can one be balanced and have nothing at all that's positive to say about what Putin has done in the past 7 years? What about benefits reform? What about the fact that the country is more stable and he has a approval rating in the vicinity of 80%? Yes, there is corruption, Putin has installed Petersburg and FSB buddies, and there has been a rollback of democracy, but I don't think it's right to be 100% negative. 100% negativity makes one suspect that the speaker is biased and not diligent in his consideration of other viewpoints. Satter's demeanor was such that I got the impression he is a Cold Warrior who never got over the high one gets from condemning the Evil Empire. And this guy used to write for the Financial Times? I thought journalists were more diligent in tracking down multiple angles.

Yay for Jes!

My sister Jes and I went for icecream at Coldstone Creamery this evening. We each had super-chocolatey icecream with brownie bits.

It's good to see Jes doing so well and being so happy. She explained to me over dinner about cytoflorology, or something like that, and I was just so proud of how much she knows. Yay for Jes!

SAIS's most quotable econ prof

Today Prof Weiss said the following:

"Don't use the word 'trickle down.' It sounds sexual."

Better Sanctions

There's a movement to create smarter sanctions that can punish illegitimate and inhumane regimes with less adverse effects on the population than traditional trade sanctions. It's not a subject I know much about, but it's of great interest to a lot of IR types. The Washington Post did a nice article on loan sanctions in the opinion section.

an excerpt from Free Trade Under Fire

I'm now reading Free Trade Under Fire by Douglas Irwin for my trade theory class. One of the chapters describing the gains from trade went into the non-economic gains, which Montesquieu and Mill described as the "intellectual and moral" benefits. I quote:

"[A] study of the effects of McDonald's on Asian culture noted that rest rooms in Hong Kong previsouly had the reputation for being unspeakably filthy. When McDonald's opened in the mid-1970s, it redefined standards , setting a new, higher benchmark for cleanliness that other restaurants were forced to emulate. . . . When McDonald's first opened in Moscow, a young woman with a bullhorn stood outside its doors to explain to the crowd that the servers smiled not because they were laughing at customers but because they were happy to serve them."

If clean restrooms and smiling service are absolutely better, regardless of cultural differences, than dirty restrooms and unsmiling service, it makes you wonder why some Hong Kong restaurant didn't use clean restrooms to get an edge over its competitors before the advent of McDonald's. (I have no questions as to why Russian customer service people's didn't smile pre-McDonalds; smiling just isn't as much of a universal good across cultures as cleanliness is, and Russian customer service was still weighted down from the baggage of communism and the lack of a profit motive.)

Mill said, "[T]here is no nation that does not need to borrow from others, not merely particular arts or practices, but essential points of character in which its own type is inferior." It's hard to know whether to agree or disagree given the strength of the Hong Kong example (a pro-Mill point) and my native, liberal instinct to say that cultures aren't "inferior" from each other, they're just different.

what I'm taking this semester

For the curious, I'm taking four classes this semester:
- Corporate Finance
- Trade Theory
- Survey of Brazil's Politics and Economy
- Strategy and Policy, a class on military thought

So, the idea is that Corporate Finance could help me in the work world, the trade theory class is required to graduate (but interesting), the class on Brazil is in order to learn about an interesting place OTHER than Russia, and the military thought class is because it's just about impossible to speak intelligently about US policy (or the Israeli-Palestinian conflict) nowadays without some understanding of military concerns.

you know it's early in the morning when . . .

...you pour hot water into your breakfast bowl before you've added the oatmeal.

Reindeer Blood Bath

The Moscow Times did a front page story and photo essay about an effort to raise reindeer for commercial purposes in Sakha, a far north region of Russia. (The largest subnational entity in the world, according to the article.)

What are the commercial uses for reindeer, you ask? Well, evidently, if one objects to killing and eating them, the commercial uses involve harvesting their antlers and . . . blood. According to the article, the blood is used to make bath powder. As you might imagine, this is not for widespread commercial use but for a narrow market of indigenous peoples. Per the Times, "The powder is dissolved in water to create a modern version of the traditional blood bath, which is popular among the indigenous peoples as a cure for many ailments."

The Russian Idea at Work

Russians have a messianic concept of themselves as the only true Christians, people who have sacrificed repeatedly, without due appreciation from the rest of the world, in order to save humanity. First, they fended off the Mongol hordes, then they fended off the Nazis. This is called the Russian Idea.

I think this Jesus-concept is very important to understanding them, and I also find there to be more than a kernel of truth in the notion that they have not received sufficient respect for their role in defeating the Nazis in WWII. (My Cold War-era high school history textbook said that the US permitted the Russians to fight the battle of Berlin (which it described as a cakewalk) because we felt bad for them what with all the casualties they had suffered on the Russian front. Excuse me, but the Battle of Berlin was bloody urban warfare.)

You can see the Russian Idea at work in a press conference Putin gave the other day. Quoting here from February's 2nds Moscow Times (www.moscowtimes.com):

"Interestingly, when commenting on the factors that strengthened Russia's defense capabilities, Putin named Orthodox Christianity and the country's other 'traditional' faiths in the same breath as the national nuclear shield."