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Where life is and money isn’t

Some of you might remember that I wrote a post about the long tail of the ruling class. The post was in Italian and got translated in English by blogger Phil Edward. I took the translation copied it in my blog (with a link), but said that I did not fully agree with Phil understanding of my post. I didn’t enter more into details. And then there was silence, and in the silence I decided it was easier to just ignore the whole discussion. But a few days ago Nicholas Carr from Rough Type wrote a post on how the long tail permits to the service the puts in touch people to make massive amount of money, but to the people who produce the actual content not much money. Absolutely true, and this is why you don’t see google advertisments in my blog. But this is a very different problem from what I was discussing when I was speaking about the long tail of the Ruling Class. Mainly because I was not speaking about the ruling class but about the ‘classe dirigente’. Which is not exactly the ruling class, although I still can’t find a better translation. Ruling class smells a bit too much of kings and queens and prime ministers. And I was actually speaking about ‘classe dirigente’ as people who have authority over a certain field.

So when Phil commented on Nick post:

I blogged on this last year, in response to Pietro Speroni:

I felt I had to answer. Because my post was all about a multidimensional space (all our interests), which gets mistreated as a unidimensional space (money). Poor chap! For a multidimensional space to be treated as a unidimensional one is fairly common, but never fair. And the general excuse is ‘to understand better’, or ‘to simplify a bit’. But I suspect that multidimensional spaces might take it personally, bacause if you treat them bad, they can become quite convoluted, if you know what I mean. Maybe I should write a long post on the importance of not making models (even mental ones) with too few dimensions. But I think I shall leave it for some time next year. And then I can say that it was long due.

In any case I decided to copy my comment to Nick post here. Continue reading Where life is and money isn’t

Bad news: IMF wants to help for the Tsunami

My dear friends, I bring you bad news. The IMF offered to help the countries affected by the Tsunami.

Good! Will say most of you (naive!).

Bad, sais I. Because the IMF is not just giving money… It is lending it:

For our part, the IMF stands ready to provide financial assistance to affected countries, in the first instance through our Emergency Natural Disaster Assistance facility. This financing, which could be on the order of US$1 billion for the most affected countries, could be made available quickly and without an IMF program.

In other words: It is not a gift, it is a loan.

Emergency assistance loans are subject to the basic rate of charge, and should be repaid within 3¼ to 5 years. Since May 2001, for post-conflict cases which are eligible for the IMF’s Poverty Reduction and Growth Facility (PRGF), the interest rate on loans has been subsidized down to 0.5 percent per year, with the interest subsidies financed by grant contributions from bilateral donors, Recently, the Executive Board agreed to consider a similar subsidization of emergency assistance for natural disasters.

And they also want interests on it. How generous!

Looking at the press. I noticed that the story had been taken by various news, yet only one clarified that it was not a gift.

You know, yesterday evening I was speaking with a friend who told me of a new book “Confessions of an Economic Hit Man”(english review here). It is the story of John Perkins…

…John Perkins, a former respected member of the international banking community. In his book Confessions of an Economic Hit Man he describes how as a highly paid professional, he helped the U.S. cheat poor countries around the globe out of trillions of dollars by lending them more money than they could possibly repay and then take over their economies

Also note how the order of magnitude of the loan that is being offered right now:

This financing, which could be on the order of US$1 billion for the most affected countries, could be made available quickly and without an IMF program.”

Is of the same order of magnitude of the one that John Perkins was offering:

my real job was deal-making. It was giving loans to other countries, huge loans, much bigger than they could possibly repay. One of the conditions of the loan–let’s say a $1 billion to a country like Indonesia or Ecuador–and this country would then have to give ninety percent of that loan back to a U.S. company, or U.S. companies, to build the infrastructure–a Halliburton or a Bechtel.

So, the IMF has offered a loan.
“Thanks, but no thanks” should those country answer.

While the rest of the world collects the money (this really as a gift) to help.
Will those countries be strong enough to refuse it.

P. S.: Post Scriptum

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Bad news: IMF wants to help for the Tsunami

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