Instead of writing a list of ambitious New Year’s resolutions, I shall keep them realistic and to myself. One of my goals this year is to stay inspired, and think about my blog whenever something meaningful comes to mind! I’m always inspired by literature (although I don’t read nearly as much as I should), so I will share some of the notable quotes that I stumble upon.

Currently reading: The Ascent of Money by Niall Ferguson.

“I myself have learned a great deal in writing this book, but three insights in particular stand out.”

#1: “Poverty is not the result of rapacious financiers exploiting the poor. It has much more to do with the lack of financial institutions, with the absence of banks, not their presence. Only when borrowers have access to efficient credit networks can they escape from the clutches of loan sharks, and only when savers can deposit their money in reliable banks can it be channelled from the idle rich to the industrious poor.”

#2: “.. Equality and its absence. If the financial system has a defect, it is that it reflects and magnifies what we human beings are like… Money amplifies our tendency to overreact, to swing from exuberance when things are going well to deep depression when they go wrong. Booms and busts are products, at root, of our emotional volatility. But finance also exaggerates the differences between us, enriching the lucky and the smart, impoverishing the unlucky and not-so-smart… The rewards for ‘getting it’ have never been so immense. And the penalties for financial ignorance have never been so stiff.”

#3: “.. A few things are harder to predict accurately than the timing and magnitude of financial crises, because the financial system is so genuinely complex…”

There is so much truth in those quotes.

Lastly, if you were ever wondering what the rest of the world was doing on July 24th, 2010… “Life in a Day”

]]> http://wentingwu.wordpress.com/2011/12/31/happy-2012/feed/ 0 Wenting http://wentingwu.wordpress.com/2010/08/06/the-future/ http://wentingwu.wordpress.com/2010/08/06/the-future/#comments Sat, 07 Aug 2010 04:53:34 +0000 Wenting http://wentingwu.wordpress.com/?p=210 Continue reading →]]> Every now and then, I like to browse through TED Talks. They usually surprise me in some interesting way. It’s amazing how technology can advance so rapidly. I just wanted to share these brain-related talks.

Tan Le: A headset that reads your brainwaves I definitely want one of those.

Christopher DeCharms Looks Inside the Brain

Gregory Petsko on the Coming Neurological Epidemic This guy studies “the structural basis for efficient enzymic catalysis of proton and hydride transfer; the role of the metal ions in bridged bimetalloenzyme active sites; direct visualization of proteins in action by time-resolved protein crystallography; the evolution of new enzyme activities from old ones; and the biology of the quiescent state in eukaryotic cells.” He’s a great speaker too!

XOXO

Fortune 500

Fortune: 50 Most Powerful Women in Business

Forbes: World’s 100 Most Powerful People

Forbes: World’s 100 Most Powerful Women

Feel free to comment with the lists I missed!

XOXO

First, thanks for the detailed reply. The last thing I want is for people to read my blog and simply believe every word I say.

Anyway, you quoted Adam Smith, who says in the Wealth of Nations that “it is not from the benevolence of the butcher, the brewer or the baker, that we expect our dinner, but from their regard to their own self interest.” I can see that many would consider this a selfish perspective. However, we need to break it down further to truly understand whether or not that is the case. Are the butcher, the brewer, and the baker selfish  for wanting to put food on the table for themselves and their families? Can we attribute their hard work to any reasons other than the one mentioned above? Ironically, it is these “selfish” actions that contribute to the most socially optimal result. Smith’s competitive paradigm states that collective surplus is maximized when individuals follow their own selfish incentives. Empirical evidence shows that people follow their economic incentives first and foremost. “Rational” political systems founded on the basis of equality and hostile to free market economics have at best failed to improve its subjects’ standard of living. At their worst, they forced their people into states of destitution. But, as Smith suggested, people acting on their own selfish incentives leads to the most optimal outcome. It is more feasible to consider the redistribution of wealth once we have established a strong foundation. Economics is not about harming others to take profit. Equity is in itself an economic concept. An equitable system is merely an alternative to allocating scarce resources amongst those who desire them.

In many fields, addressing the inequities in the world is a major focus. Economics is no exception. However, this falls under a slightly different topic. We are now looking at the whole picture as opposed to the sum of its parts. We should take action in redistributing wealth to benefit the worst off, and as you have mentioned, economists are indeed doing so. Another thing to understand is that the world is not perfect. Perfect competition will never exist, and same goes for other economic principles that are too good to be true. It is because of this that people can take advantage of the economic inefficiencies in the world, creating an inequitable distribution of wealth in the world. Subsequently, the rich get richer and the poor get poorer. This is just one more reason why politicians need to understand economics – in order to understand market flaws that contribute to major societal issues.

Plato once said that “one of the penalties for refusing to participate in politics is that you end up being governed by your inferiors.” With that said, I think that people in completely different fields will wish that the politicians knew more about their own field in order to do a better job running their country. I also believe that the person best fit to run a country is probably the person that knows a bit (better yet, a lot) about everything. We know that’s improbable at best.

To specifically address your concern of the lack of scientific background of politicians, let’s consider your example of harm reduction. Ideally, we would want to fix every existing issue in the world. But given the endless list of constraints, we cannot do that (this is the principle of scarcity). When some issues are taken with more urgency than others, it’s easy to notice the issues that have not sufficiently been taken care of. Canada currently has the strongest economy in th G7. We have a strong growth in employment rates, with 93,000 new jobs created last month, when the consensus estimate was 20,000.

By saying that politicians need to understand economics, I don’t mean that they should ignore science. I’d also like to note that I had previously said that politicians need to understand economics, and not be economists themselves. One does not need to be an economist to understand economics. By the same logic, one does not need to be a scientist to understand science, and the issues revolving around science. Without a great economy, a country simply cannot afford to spend money on advanced research, and such. Without having an intense scientific background, a politician is still capable of understanding the basics behind issues that can be mitigated by scientific means. Whether they do or do not attempt to understand those fundamentals is a whole other issue of politics.

You also said that, in your opinion, “politicians should be, first and foremost, human, as opposed to egocentric, profit-driven psychopaths”. The reason why capitalism works is because it is an empirical system which recognizes that people follow their economic incentives, instead of being told what incentives to follow. To understand how society functions, politicians need to understand that the average person is a self-interested individual looking for economic incentives. By no means did I imply that politicians should be self-interested individuals that have a complete disregard for the public interest. In fact, every president or prime minister’s own self interest is to advance the public interest.

You stated that “much social phenomena cannot be solely viewed through a cost-benefit analysis or profit-maximising perspective”. Unfortunately, in politics, and in law, we are often forced to put a price on everything, and conduct cost-benefit analyses. We put a price on pain and suffering (maximum is $300000, only quadriplegia, paraplegia, severe brain damage and similar injuries can be be paid near that amount), we put a price on the worth of one’s dignity, a price on one’s life, the list goes on. Of course, I agree that social phenomena should not be viewed through that perspective, but that is to be left to the minds of philosophers. Reality tells us that there is indeed a price on everything, but sometimes not on monetary terms. Economics is not necessarily about money, money is just the most practical way to quantify costs and benefits.

Another important thing to keep in mind is that we cannot equate one economist’s actions to that of all economists in that person’s position. Even if you do not support Mr. Harper, you cannot allow his actions to represent that of any one else’s. Not all economists have the same values and beliefs. More importantly, we cannot equate economists to self interested individuals that only care about profits while ignoring all other aspects of life. Having said that, the “biased” ideology that is characterized by self interest and profit is called capitalism. To disagree with that ideology, that induces a different conversation entirely.

Finally, I would like to add that, economics does not stop us from helping others, and it certainly does not stop us from changing the world. Individual self interest is one of the first things taught in economics for a reason. It’s just the beginning. It governs individuals from the bottom of Maslow’s Hierarchy of Needs, as psychologists suggest. We first take care of our basic needs for survival, and then we want some comfort in knowing that we are safe, etc. Once we are capable, we can go on the help others, and change the world.

XOXO

I’m actually surprised I never talked about abortion on my blog, it’s one of those issues that I’m really passionate about. I’m very much pro-abortions, and support stem cell research.

Levitt and Dubner, the genius minds behind “Freakonomics” talked about how crime rates in the US were extremely high in the 90′s and predicted to be growing. But then it dropped sharply. Someone named Norma McCorvey changed everything.. If you’ve ever learned about someone named Jane Doe (I’ve read about her in a few textbooks now), you’d be interested to know that her name was originally Norma McCorvey. Basically, she lead the class action lawsuit to legalize abortion. Why did this change everything? Well Levitt and Dubner say that “not all children are born equal… studies have shown that a child born into an adverse family environment is far more likely than other children to become a criminal.” Finally a realistic explanation for the dramatic drop in crime rates.

In order to have children, you need to be capable of raising them. What does capable mean? Well I’m sure the definition varies to a great extent, especially in this context. However, you do need the basics to be capable of raising children. You would need to be financially capable, able to give them enough attention, and hopefully a good role model too. That’s simple enough for a lot of families, but hardly all of them. Sure, adoption is always an option, but the number of children that need families compared to the number of families that need children is probably a scary thought.

And then there’s the issue of “taking a life”. If you think it’s unfair to take an innocent life, have you thought of how unfair it is to put someone through a miserable life full of uncertainties? If a child does not grow up in an adequate environment, the consequences are endless. As well, taking these “lives”, we can potentially be saving lives, and I’m not talking about the reference to the decreased crime rates. The last time I checked, stem cell research is pretty promising. Most people reading this can probably come up with many more arguments, but those are just a few things to think about.

XOXO

While studying in university, I notice that people talk about money all the time. Most people anyway. I really don’t have to say much to convince you that money affects virtually everything we do, and many major events that happen in the world. “People respond to economic incentives before anything else,” says my good friend who is, I’m sure, one of the greatest minds of our time. It’s true, people in any country would want a certain amount of money over a right to vote. The amount differs, but the basic principle remains transparent.

During one lecture in cultural psychology, the PhD student (who was teaching a particular topic in class to get teaching experience, minor details) gave us various of scenarios and asked us how much money we would have to be paid before we would perform a certain action or a series of actions. For example, she asked us how much money we would have to be paid in order to go steal a TV from a rich family and keep it. Then she’d give us much more outrageous scenarios like having intercourse with a chicken and then eating it (sorry, we didn’t get a warning in class either..). There are many dimensions involved, but we won’t go into that much detail. My point is, you can almost always put a value on something, if you think about it that way. There are exceptions of course, but that’s why I said almost.

So let’s think about democracy. I’ve always been the one that questioned the general attempt to try to get as many people to vote as possible. Don’t get me wrong, I would love to see the day when everyone cares enough to vote during elections. However, that’s just the thing, not enough people care. And honestly, I think that only the people that care and knows enough to make an informed decision are the ones that should be voting. It almost seems like common sense to say that only the people that care are the ones that goes out to vote. But that is so not true. There’s something called a bandwagon effect, and it is so powerful especially in combination with other social forces out there. I’m sure that’s not even the only thing at work here.. Or else why are there only two main parties competing during elections every year in such a diverse country?

As well, have you noticed that the democratic countries are usually the ones that are relatively developed? In lesser developed countries, people have more important things to worry about than their right to vote. Of course they would still like to have some basic rights, but it’s more important to them to have food on the table, and to send their children to school. Even here in Canada, I’m sure there are people that will waive their right to vote in exchange for paying off their tuition, or some other extremely large sum of debt. I’m not saying that most people will, but definitely some.

So anyway, the whole topic came up when my friend said that politicians need to know economics. If they don’t, it’s just an unmitigated disaster. What makes people happy? Good food, nice houses, job opportunities…. The list goes on. It’s all economics.

XOXO

It’s all about economics.

Some people want to be doctors and lawyers. Others are brainwashed to want to be doctors and lawyers. Most people claim for be in the former category. But when we all want to achieve the same goals, we can’t all achieve it. That’s just terrible, but it does make us all work harder to achieve those goals. Some say that you work harder if you want it more, and other claim that it’s destiny. No, it’s at least 50% luck.

So anyway, I watched a Ted Talk earlier today, and the speaker was trying to promote his own field to people, and especially to encourage people to encourage children to go into that field. This is just another force trying to pull people in different directions. It’s a good thing that there is an abundance of attractive goals in the world, or else I’d be worried for the survival of our species (slight exaggeration).

Other than being different, the next important thing is for us to be practical. If we all just wanted to be models and actresses and singers, and it can’t happen for most of us, it’s time to be practical. I’m sure some of the most successful people in the world didn’t get their first choice for a career. The person that comes to mind is Lloyd Blankfein, and I don’t care what’s happening to Goldman, he’s still a great CEO.

I also wanted to throw out a cool phrase of the day: Reductio ad absurdum (it’s latin). Sheldon said it on The Big Bang Theory, and when he explained it, I thought it was just hilarious! Wikipedia says that ” reductio ad absurdum is a form of argument in which a proposition is disproven by following its implications logically to an absurd consequence.”

XOXO

Since the exam period is usually when I spend the most time on the internet (it’s true, sadly), I spent some time watching youtube videos as a great expense to my Finance final which is worth 65% of my grades, which has a 53.7% likelihood of becoming my specialization in the near future. Where did I get 53.7%? I made it up, as always.

Anyway, back to the youtube topic. I ended up on youtube because I put so much thought on the Goldman Sachs thing lately. I thought I’d search up dear Mr. Lloyd Blankfein, Harvard graduate. I first of all do NOT understand the investors that are just so urgently selling on Goldman, I really don’t it as that big a fail. Although I don’t know every detail about the lawsuit, I saw the dramatic price drop as an opportunity. Since I had some difficulties starting my own portfolio a month ago (my ideal broker has some incredibly strict restrictions..), I’ve been urging my parents to buy Goldman sometime within the next xx time period.

It’s so easy to get off topic, haha. Anyway, I ended watching some interviews on a few top-bank CEO’s and other influential financiers. In one of them, Blankfein talked about how he was planning the amount of time that it would take him to get to the supreme court. He had no idea that he’d eventually end up where he is now. As an advice (mainly targeting young people), he mentioned that it is sufficient for us to plan out the next 4 or 5 years of our lives, and not think far beyond that.

I also watched some of those girly TV shows on youtube (just highlights), I won’t mention which ones. It reminded me again something that’s far too typical of a lot of people, including myself sometimes. On TV, whenever I watch those competition things, mainly with only girls, they talk about how badly they want something. They see their goal and run after it. That’s really good in most cases, but I think that people have to learn to not want something so much sometimes.

It may be somewhat shocking that I just said that, but allow me to explain. As I mentioned earlier, Blankfein did not always know that he’d be in business, not to mention being CEO of the most powerful financial institution of the world. He didn’t just keep his eye on one specific long term goal. I think that goals are ultimately great, especially when reasonable. However, one must always keep in mind that when things change, that original goal may also change. It’s hard to achieve much if you don’t keep an open mind and take advantage of opportunities that may not necessarily catalyze your achievement of that one important goal.

Of course, I’m not trying to tell you to stop being passionate about something, because passion is what keeps you going. Passion fuels your ability to reach farther. However, is there such as thing as too much passion? YES. Why? Because, in addition to what I’ve mentioned before, there’s also disappointment. Sometimes, not everyone can win. If you fail at something that means a lot to you, being passionate about that something could just be your Achilles heel. If you become overly obsessed with just one thing, you can get quite a hit if and when failure occurs.

Here’s a random, and kind of funny example. Some of my friends know that I’m very very good at bargaining. That’s definitely something I learned growing up in China. Anyway, I remember my first visit back (after I came to Canada), man that was a long time ago. All I remember was the shopping and the food. Let’s talk about the shopping. I remember how my aunts and my cousins would go shop with me, and whenever I wanted to buy something, they’d do all the bargaining. And I thought I was good.. Anyway, they told me to never express that I want something, especially if I “need to have it”. Because that’s weak. These salespeople were extremely experienced in reading facial expressions. I can imagine how well they would do in sales in North America or something. They would have amazing sales records. So back to my story.. I was always told not to express interest in buying something, or else they’d just make something 10x more expensive. I had to taught myself not to want anything too much, and eventually something else would catch my eye.

I do realize how far fetched that story is, but my point is: sometimes (maybe rarely) it’s a disadvantage to amplify your desire to achieve one goal. It may blur your vision, and you’d cut other opportunities out without realizing it.

So when should you want something. Well that’s up to your own intuition. When that unbelievable opportunity comes, you fight for it. Recently, one came up for me, a job opportunity. It’ll be very difficult for me to get it, but I want it enough that I just might. Fingers crossed.

Just some thoughts at 4am.  I’m getting out of the library now, good night everyone!

XOXO

I knew I’d get your attention. (If not, then don’t tell me..:)

I really should be studying for my exam TOMORROW, but I couldn’t resist.

I’m sure you often hear people say “money isn’t everything”, I sure hear it a lot. Money may not be everything, but it definitely is a lot of things. It differentiates one person from the next. Luck is even more important than money, because everyone’s wealth depends on luck, at least 50% (but realistically, I’d say 94.3% of your wealth depends on how lucky you are overall). I believe Mr. Warren Buffett said that he’s lucky he was born in America, and to his specific family, because if he was born in Africa, he would not have had use for his great skills (or something like that). Even beyond that, he would not have been so rich and famous if he didn’t get the specific opportunities that he had gotten, if the timing was different, etc. As well, if his father didn’t do anything finance-related, he would not have been introduced to the markets at such an early age. Of course, I’m not trying to undermine the hard work needed for anyone to be successful.

Anyway, the point of this post is not luck, I wanted to talk about money. As I said before, people say that money isn’t everything. I almost disagree. Your wealth decides what you eat, what you wear, and  where you go to school (if you get to go to school). This in turn decides who you meet, which 80% of the time decides where you’ll work. Where you work further influences your life in that it gives you more opportunity, and more experience. If you think that’s all I’m going to say about money, you are so wrong.

I was inspired to talk about money here because I was just reading about it in my textbook. Researchers have consistently found a correlation between socioeconomic status (SES) and life expectancy. I wanted to question this at first too, but… It does not have to do with access to healthcare because this correlation has been found in such countries as Canada, with universal healthcare. The trend is also found in every income bracket. In Sweden, I believe everyone gets equal chance at education as well, and the correlation between SES and life expectancy was still positive. They also had data from the military in a country (I forgot which), all factors are now the same, except for one’s rank. They found that people with higher rank lived significantly longer. However, when people went to extremely underdeveloped countries in Africa, this correlation wasn’t as clear. The explanation for this (backed by further research) is that people who feel poor relative to others in their culture are more stressed, and tend to encounter more problems. However, if everyone around you is poor, you don’t feel as bad. In contrast, people that are of high status, high income level, and high influence, are likely to be more satisfied because of this. So there’s a good incentive to study hard, and ultimately build a great career.

XOXO

P.S. Another random fact.. We all know that Japanese people live slightly longer. Research has also proven that they have a more distributed income there. That’s not the only reason of course. Their food is also healthier, compared to say.. North American food. Research suggests that Japanese immigrants that continue to eat Japanese food in the States as opposed to eating American food generally live longer. The professor that wrote my book says that his Japanese friend claims it’s the miso soup! Who knows? haha.

This TED Talk by Daniel Kraft proves it. Just incredible.

Here’s a good website I found if you’re interested in some additional info: http://stemcells.nih.gov/info/basics/

XOXO