Boring Man Killed in ATV Accident

(click image to enlarge)

Between Portland and the western slopes of Mount Hood sits the small town of Boring, Oregon. You can imagine the jokes made about the place and the people who call it home, to say nothing of the problems faced by newspaper editors in writing headlines for, well, Boring stories. Today's front page of KGW.com - NBC's Portland affiliate - is evidence enough of this (see above pic). It's bad enough to live in a town named Boring, let alone having it as the final adjective placed before one's name.

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Governor Rod Blago...Governor Smith

Remember those halcyon days back in 2006 when Illinois governor Rod Blagojevich was just another seemingly shady Chicago politician?

Here's your trip back that simpler time, via the Daily Show.

The Daily Show With Jon StewartM - Th 11p / 10c

Pill of Rights

Barack Obama Interview
John McCain Interview

Sarah Palin Video
Funny Election Video

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Hire Me or Out Come My Butt Cheeks

Should you ever be rejected for a government job, you might consider this fellow's solution: take your morning constitutional in the nude on the lawn of the National Assembly.


You have to give the guy credit for efficiency. After all, he managed to get some exercise, show his displeasure, and air out his bits-and-pieces all in the same activity. Having said that, if it was a job he was hoping to get, I would have recommended a jacket and tie. Maybe even toss on a pair of britches while he's at it.

A couple more pics here.



(h/t to Korea Beat)

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The Price of Minimum Wages

Aside from his push for more free trade - which has, I'm sure, irked Chang Ha-Joon - I've been waiting to see the much-ballyhooed free market tendencies of President Lee Myung-bak in action. Evidently not wanting to disappoint me, President Lee this week rolled out a plan that at least gestures toward economic sanity:

The Lee Myung-bak administration yesterday made public a plan to allow senior citizens to work in jobs for less than the minimum wage, freeing employers from the statutory wage standard.

The Ministry of Labor unveiled the plan, titled “improvement direction of the minimum wage system.” Senior citizens aged 60 or older will be asked to agree to remuneration lower than the minimum wage to find a job. According to the National Statistical Office, this would involve 3.13 million Koreans.

Now, it bears saying that seniors should not be paid less for their work simply because they are of a certain age, but neither should they be prevented from working because a government policy (i.e. minimum wage laws) states that a mutually-agreeable wage is too low.

More broadly, President Lee's proposal is a good opportunity to quickly review a few of the fallacies contained within minimum wage laws. The first point to mention is that your wage in a market economy is not determined by an arbitrary government policy; rather, it is a measured estimate of your productivity. If your hourly productivity - the value of the goods and services you produce in that time with your skills and the equipment you employ - is worth, say, KRW 2,000, then your employer cannot pay you KRW 3,770 (the current Korean minimum wage, despite the mistaken reporting in the above-linked Joong Ang article) for very long without running up against an obvious financial conundrum. Even with the best of intentions, a government policy can no more raise your hourly productivity than it can alter the laws of gravity.

We might further find it useful to ask why, if a minimum wage of KRW 3,770 (to be raised to KRW 4,000 in 2009) is so helpful to low-skilled workers - and if that KRW 3,770 wage makes society as a whole wealthier - why not raise it to KRW 10,000 per hour? Hell, why not KRW 50,000? Moreover, if the minimum wage is such a dandy policy, why do we need exceptions to it for seniors or, as in the United States, for students, disabled people, and and young people?

The answer, of course, is that the hourly productivity of a 65 year-old with little modern job training is generally not worth KRW 50,ooo per hour or, in many cases, KRW 3,770 per hour, which means that this person will simply not be hired by any profit-seeking company. Credit the minimum wage laws, then, with more addition to the unemployment rolls. That the senior in question might well have been willing to accept a lower wage is, in the government's eyes, immaterial: if an employer violates the law and pays workers less than the minimum wage, according to Article 63 of the Korean Labor Standards Act, the employer can be sentenced to up to three years in prison and fined up to 20 million won.

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Read Up

At my recent KDI interview one of the panel members asked me for my thoughts on the causes of and a few possible solutions to the current economic crisis. I like to think that I have the shadings of an understanding about this topic - albeit at a very basic level - but when put on the spot to answer such a query in limited time I gave what can only be described as a fumbling response: that while several factors, such as an asset bubble, poor risk management and bad government policy all likely contributed, we will be debating causes and effects far into the future, just as we're still doing with the Great Depression.

Oops.

Having set my own tripwire, a different professor wanted to know what, in my opinion, caused the Great Depression. Once again, I have an opinion on the matter - hopefully one grounded in fact - but I clearly need to work on my Meet the Press-style answers.

For anyone else out there seeking to understand the origins of this current economic tornado, I recommend this article by Baily, Litan and Johnson of the Brookings Institution, entitled, appropriately enough, "The Origins of the Economic Crisis."

Yes, it's forty-five pages, but it has pictures (well OK, it actually has graphs and charts) and it won't pose a problem provided you can read an average daily newspaper. I especially recommend that you read it if you're one of those folks who goes around reflexively and selectively blaming Wall Street, the government or the Freemasons for this economic crisis but who doesn't know a CDO from a CDS, an ABS from a MBS, or how a GSE might have affected the whole lot of them. This paper won't make you an expert, but it will give you a taste of the buffet of fault that lies at the root of our current woes.

And believe me, it's an all-you-can-eat buffet.

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The Hynix Rescue

A Hynix facility in Wuxi, China.

One of the most interesting stories of this past week - in South Korea, at least - was the news that the government plans to orchestrate a rescue plan for Hynix Semiconductor, the world's second largest memory chip manufacturer. As Mark Osborne of Fabtech.org reports:

Hynix Semiconductor is facing a cash crisis as losses deepened to over 1.4 trillion won in 2008, approximately US$972 million in the first three quarters of the year as well as facing repayments on maturing loans in 2009 that have been estimated at over US$500 million. Hynix is estimated to currently have cashable assets of approximately US$1.2 billion. However, losses are expected to climb above 3Q08 figures of approximately US$300 million in both 4Q08 and 1Q09, significantly eroding its cash balance, which does not include capital expenditure requirements for 2009.

Troubles indeed.

I say that the government will "orchestrate" a rescue, though, because under World Trade Organization regulations the Korean government can't just inject cash directly into private corporations. Even using government-controlled banks to help Hynix through its 2001 bankruptcy resulted in the US slapping punitive tariffs on Korean memory chips, tariffs which were only repealed in August, 2008. Instead, the Korean government will probably try to charm Hynix's creditor banks (the largest being Korea Exchange Bank) into tossing the company a lifeline. Trouble is, these banks already own a 36% stake in Hynix, which just last month they announced their intention to sell, and it's hard for me to see banks lining up to throw more money at Hynix in this economic climate.

Anyone with half an eye trained on this industry probably could have foreseen these troubles on the horizon for Hynix. Memory chip makers are in the unenviable position of selling a product which, due to a supply glut and the resultant collapse in prices, has become largely commoditized, even as that same product depends on enormous R&D expenditures to ensure continuous advances in very sophisticated technologies. Clearly, something had to give.

Much to everyone's surprise, Hynix managed to emerge successfully - indeed, profitably - from their bankruptcy earlier this decade even after spurning an acquisition offer from US-based Micron. Nowadays, however, the semiconductor industry is crowded with a surfeit of companies producing a surfeit of chips for a shortage of customers - a great situation for consumers, but an untenable position for the companies. That Hynix got into a contest with Samsung Electronics (the world's largest chip maker) to see who could produce the most chips didn't help their situation, reports the Joong Ang Daily:

On top of the oversupply of memory chips, which dragged the price of the next generation one-gigabyte chip from $2.25 per chip in August to $1.19 in September, the market is facing a global economy that is heading quickly towards recession.

Hynix isn’t the only company suffering from the global downturn.

Hynix was playing a game of chicken earlier this year with other memory-chip manufacturers, including Samsung Electronics. It overproduced chips in an effort to win market share.

The over production backfired and only added to the recession of the semiconductor market.

This is an industry in obvious need of consolidation, an event that, according to Osborne of Fabtech.org, will become less likely if the government-driven rescue plan occurs:

Although consolidation in the DRAM market has long been touted as a necessity to reduce overcapacity and fierce pricing pressures, little has actually happened on this front for the last two years. With governments in Korea and potentially Taiwan underpinning further cash injections into memory manufacturers, consolidation could be pushed-out, exacerbating short to near-term recovery in the memory markets.

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The Wonder Years

You think times are bad now? Try living in the 1970s.

As if to encourage my few pollyanna tendencies, a friend recently lent me his copy of Bill Bryson's Shakespeare: The World as Stage, a brief and - because it was written by Bryson - breezy account of, essentially, what we don't know about The Bard, which is in fact a great deal. Despite the famed portraits we see in every bookstore around the world, for instance, we don't actually know with any certainty what ol' William actually looked like - an intriguing mystery, and only the beginning.

What we do know, however, is quite a lot about the era in which Shakespeare lived - the sixteenth and seventeenth centuries - and this is where me being a pollyanna comes into the discussion. This period of history was, to misplace a Dickens quote, the best of times and the worst of times. Bryson paints it this way:

Few places in history can have been more deadly and desirable at the same time than London in the sixteenth century. Conditions that made life challenging elsewhere were particularly rife in London, where newly arrived sailors and other travelers continually refreshed the city's stock of infectious maladies. [45]

London, and presumably every other corner of the world to a better or worse degree, was a squalid petri dish of disease in the sixteenth century, where thirty-five years was considered a ripe old age. Suffice it to say that for the opportunity to see a first-run Shakespeare play, these Londoners sure put up with an awful lot.

In economic times as turbulent as those in which we now live, then, reading history can be instructive, even soothing. But you don't even need to go all the way back to Elizabethan England, as the 1970s will do just fine in reminding us that, for all the heartburn and woe spawned by the crash of '08, we really are fortunate to be alive at this moment. Say what you will about financial uncertainty and ballooning public debt, but at least our theaters are not being closed every other week due to outbreaks of plague (as they were in Shakespeare's time) and, perhaps even more importantly, we no longer have to drive Ford Pintos and AMC Pacers, much less listen to Three Dog Night eight-tracks on the decks therein.

"In general, life is better than it has ever been," writes PJ O'Rourke," and if you think that, in the past, there was some golden age of pleasure and plenty to which you would, if you were able, transport yourself, let me say a single word: 'dentistry.'"

I cringe when friends, colleagues, or family members start to rhapsodize about "the good old days," about how life was better way back when...back when, I guess, a person had the good fortune to drive a Gremlin with denim upholstery, as in the '70s, or to enjoy a bout of cholera or some other infectious disease that afflicted humans throughout much of history but which scarcely chances to touch our thoughts today. Oh, sure, I occasionally feel a twinge of nostalgia for the 1980s - that time of my youth - for Ozzie Smith, Magic Johnson, The Karate Kid, and Toyota Supras. But this nostalgia is just that: romantic reminiscence. Given the choice, I'd never choose to actually live again in the 1980s, just as Brink Lindsey and David Frum (as seen in the video clip below) shudder at the thought of reliving the 1970s.

Feel free to complain about the trials of our times, but be sure to keep your life and events in their proper perspective.

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Canoes for Cannibals

A cab takes a beating at a demonstration of 1,500 taxi drivers in Yeouido, Seoul yesterday. The protest was held to urge lawmakers to approve a bill to reduce the number of taxis and to allocate a 1 trillion won ($677 million) government subsidy to taxi drivers. [Yonhap]

First, an old joke:

An Englishman, a Frenchman and a New Yorker are trekking through a jungle in some distant, savage land. Inevitably, they are captured by cannibals.

As the three hapless travelers are hauled into camp, the chief cannibal walks up to them and says, "we're going to kill you, eat you and use your skin to make a canoe, but we're going to let you choose how to die."

The Englishman pulls out a revolver, says stoically "God save the queen," and shoots himself in the head.

The Frenchman takes out a cyanide capsule, screams "Viva la France!,"pops the capsule in his mouth and dies.

The New Yorker pulls out a fork and starts stabbing himself all over his body.

Even the cannibals are a bit taken aback at this prolonged death and try to stop the fellow.

"What are you doing?" asks the chief.

The New Yorker responds, "you want a canoe? I'll give you a fuckin' canoe!"

* * *

One of the great benefits of living in a foreign country is that one is nearly always bewildered. Every day, when I step outside my front door - and sometimes even when I don't - I am confronted by people doing strange and perplexing things that, while perhaps not wrong in any objective sense, are enough to make me scratch my head and wonder if there might not be a better, more sensible way to go about things.

As exhibit A, I direct your attention to the picture and caption with which I began this post, the one that shows taxi drivers going Luddite on a cab. As the caption says, they were throwing this particular tantrum in the hopes that this would prod the Korean National Assembly into removing from the streets of Seoul some of their taxi-driving colleagues who, through competition, decrease their monthly earnings.

Upon hearing of this, I was again reminded that business people are consistently among the strongest opponents of a functioning free market. Having long ago eschewed the "if you can't beat 'em, join 'em" mindset, Korean businesses in particular seem to consistently adopt as their modus operandi one of the following:

A) If you can't beat 'em, accuse 'em of monopoly.

or

B) If you can't beat 'em, ask the government for subsidies and for restrictions on the other fellow's freedom to enter a profession of his own choosing.

Even putting economics aside, destroying your own primary piece of capital equipment can hardly be the best way to gain political support for your requested subsidy, as the first subsidy monies allocated for taxi drivers will now have to spent replacing that battered cab. Better perhaps to find the black sedan of some National Assemblyman and threaten destruction to his car if your subsidy doesn't come through. In beating up your own cab, you're little different from a New Yorker making canoes for cannibals.

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A Note on Mumbai

In late 2006, my wife and I took our honeymoon in India and our first stop was Mumbai. Stepping from the plane, you're immediately struck by the reality of a billion people living in the country, and even more by the seeming chaos of the place. India has a certain unhinged quality to it, as though no one's really in control, as if the whole merry-go-round could spin off its axis at any second. It is, however, this chaos that makes India irresistable.

Mumbai very quickly became one of my favorite cities in the world, a ranking it retains to this day. Sure, it's not as romantic as Prague, nor does it heave and ho with the free market dynamism of Hong Kong. It's not a world capital like New York, and you could do worse than Vancouver for laidback cosmopolitanism. And where cleanliness is concerned, Mumbai is the antipode of Singapore.

What Mumbai does have, though, is pageantry. The city is a multi-ethnic, Dickensian mosaic of sparkling wealth, crushing poverty and all the strata betwixt - all of it laid across a beautifully crumbling Victorian grandeur. Mumbai simply seethes with energy and noise and bedlam. It is, to quote Bill Hicks, a real pocket of humanity, though in this case I mean that in the most positive sense of the word.

Unfortunately, first impressions are occasionally correct: in India, no one is in control and, all too often, the carousel does go off its axis. We were reminded of this once again last week when a small, heavily-armed band of terrorists rampaged through the city, beginning in the pandemonium of what was once called Victoria Terminus (now Chhatrapati Shivaji Terminus) and finally laying siege to the Oberoi Hotel and the iconic Taj Mahal Hotel.

I lived in Prague in the late 1990s and thus watched with sadness as the elephants from the zoo floated down the Vltava River and past my old neighborhood in the floods of 2002. Similarly, the 2004 tsunami in Southeast Asia devastated places that I had recently visited and enjoyed, and which were now unrecognizable on the BBC. As devastating as natural disasters are, though, they are somehow easier to digest, if only in a fatalistic, "oh-well-I-can't-control-it-so-why-worry" sort of way. The recent attacks in Mumbai, by contrast, left me with a knot in my stomach unmatched by the high waters of the Vltava or the tidal waves of Southeast Asia.

No city deserves brutality as was visited on Mumbai last week, least of all Mumbai.

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Come Easy, Go Easy Love

The Korean newshounds have been all a-twitter of late about the ongoing trial of South Korean actress Ok So-ri for adultery. According to her allegedly cuckolded husband, Ok was making more than pesto with her Italian cooking instructor and he - that is, the husband - wants Ok tossed in the clink for these extramarital dalliances.

That Korea even has, much less enforces, an anti-adultery law will no doubt catch foreign readers by surprise. Several American states still have such statutes on the books - hell, in Michigan, slipping around on your spouse could technically earn you a life sentence - but these laws are rarely enforced. Pakistan, Iran and India also have laws against adultery, the enforcement of which varies with the times. In East Asia, the governments of Korea and Taiwan retain their position as the final arbiters of marital sanctity, though even in these countries adulterers are seldom imprisoned.

According to this excellent IHT article, about 70% of Koreans support the local adultery law, a number which I find staggering given the low esteem in which politicians and the government are held here. If someone thinks the country is being run by a bevy of nincompoops, why should those same nincompoops be charged with adjudicating the most intimate details of a couple's life?

The same article includes this prize-winning quote from one of the aforementioned nincompoops:

"'Some argue that no law should intrude beneath the quilt," said Han Sang Dae, a Justice Ministry official who defended the adultery law during the Constitutional Court hearing. "But if we allow freedom for extramarital affairs, it will threaten our sex morality as well as monogamy, a foundation of our society."

I can only assume, then, that the Constitutional Court - in its drive to protect sexual morality and monogamy - will demand that Korea be purged of its thriving sex industry, acting to eliminate the numerous love hotels and red light districts that dot the South Korean landscape. I'll bet dollars to donuts that the patrons of these businesses are not all singlefolk.

But let's say a government does want to prosecute adultery. How do you define the deed? Korean criminal law very strictly defines adultery as traditional, vanilla vaginal intercourse between a married person and someone who is not his or her spouse, a definition which - to the great comfort of would-be adulterers across the country - leaves available a veritable buffet of sexual acts from which to choose. That said, you'd be hard-pressed to find a married person whose definition of adultery was as narrow as the Korean courts, which means that the adultery law in Korea is simultaneously draconian and toothless.

According to the above IHT article, about 1,200 people are indicted each year under this law - which calls for up to two years in prison for the adulterer and his/her bed buddy - but apparently very few people are actually sent to prison for such trespasses. In the end, the criminal proceedings in such cases end up being a mere airing of dirty laundry - you know, like the divorce hearing that they ought to be.

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