FAQ

Soon Cafe Salemba might serve FAQs menu on history of Indonesian economic thought to answer boring repetitive rap on said topic.

In the meantime, you may wish to read essays by Thee Kian Wie published in this book in 2004, especially on the ill-fated Indonesian industrial policy.

Reading the Nationalism-o-meter

On the way to Metro station this morning, I asked Sisil why Indonesians in twitland and fb became suddenly very nationalistic on Aug 17 -- and we don't.

She thought it's a wrong question. It is not that these people's nationalism-o-meter increases these days, but the urge to update twitter/fb status. The latter motive will pick up anything closer to home in one particular day -- any mass psyche deemed relevant on the day, like nationalism in every Aug 17 or religious revivalism in every Ramadan.

I concur.

In Defense of Mall

So my two professors went to Manila this summer. One of them was amazed on how cool the malls over there, and the other offered an interesting interpretation: it's in many ways a form of private government.

Here is the reason.

Operating such huge (and usually integrated with business and residential complex) mall needs sophisticated technology and management. And it has to be efficient. With thousands of human resources involved as well as state of the art logistic, it needs high skills and knowledge to run the complex.

Now enter the common explanation for under-development in developing countries: lack of skills and "modern" culture.

These malls show that these line of reasoning doesn't add up. The businesspersons running the mall can deliver not only private goods (you know, from branded bags to broccoli to two bedrooms apartment) but also public goods, like open to public parks, between-the-shops-aisles for window shopping, or the water fountain dancing New York New York (to the dismay of barista Aco).

They are like government -- while the real government is busy doing something else. And the key is, I think, incentives that works, and it is profit motive.

I think it's a right observation. The mushrooming malls as well as those clustering real estates somehow also shows that government has failed, and, to some extent, private actors stepped in. And the blaming for lack of "modern culture" among the people seems to be unfounded.

A Short Trip Note

So I managed to stroll around the area much of The Warhol Economy describes. It's a cute neighborhood or cluster that makes the city magnet of the young creative people -- and of course a perfect place for a great coffee time talking about, for example, what Varvatos doing at the ex-place of CGBG?

But that's just one face of the City-- and I heard the truly striving creativity has been somehow moved across the tunnel to Williamsburg. The rent has just been unaffordable.

The other part is a place where probably has the world's highest the density of neon ad-lights per metre square. A classic tourist trap. But you may want to go there at 5.30 am to get different feel.

There when the neon light mixed with the early sunshine between skyscrapers and the Good Morning America does not event start yet, you may catch the glimpse of how NYC made of -- well, some of it. Trash collector truck, street vendor who sells coffee and the Times in that early hours, the City finest, and limousine driver in front of ABC studio --probably waiting for Sheryl Crow.

"Life in here is very regimented", said a parking attendant, "I want to move to South Carolina"

I guess he already said it twenty years ago, but somehow he's still there in the city that never sleeps -- even when Lehman Brothers across the street is no longer there.

Nothing, really

Hi, I am at the public library -- a great shelter to avoid scorching heat. Not much to tell lately. Everyone is into the World Cup -- the FIFA's World Cup as those TV anchors here call the event. Probably talking about the World Cup is of little use and value added because everyone has already had her/his own related info needed. This is four-yearly event when everyone can entitle themselves pundit, and everyone else don't care about such punditry nor the biases.

So really, this is a posting about nothing (to follow the abstract of a funny paper by Dixit)

Is Economics Hard?

Recently, there has been a discussion in the blogsphere, sparked by a short essay of Kartik Athreya: Economics is Hard, Don't Let Bloggers Tell You Otherwise.

Well, economics is hard, at least for me, and I believe for the baristas here too, who have spent days and nights trying to understand one chapter of, say, a standard micro or macro grad textbook.

Then, why the baristas here seemingly make economics fun?

Because it is indeed fun, and we want to share the fun to you all, including the non-economics students, by skipping most of those technicalities and jargons. We at the Cafe want to convey a simple message that you can use economics to see things differently. The most politically motivated purpose is probably just to warn you against ill-informed press corps.

I have no illusion that hanging out in the Cafe would substitute for a proper formal economic education -- but it is equally annoying to see some people believe he/she has mastered economics simply by reading one or two popular books by Stiglitz or Krugman. This is why sometimes we launch a sharp-tongued attack against his/her arguments (note: the argument, not personal)

Is econ hard? Yes. So are anthropology, political science, English literature, biology, and any serious attempt to understand things rationally and systematically.

Supposedly Summer Reading List

OK, most of you will be glued to TV watching the World Cup. Aco has been deriving some lemmas regarding optimal direction for penalty kick, taken from Levitt paper. I know, you may think we economists have funny way in seeing things, including football, but, sorry, just live with that, OK? You will get used to, as many of you already did.

In the meantime though, the Cafe is preparing to buy books for your summer perusal. Here is the list
1. Fault Lines, by Raghuram Rajan
2. The Company of Strangers: A Natural History of Economic Life, by Paul Seabright
3. The Upside of Irrationality, The Unexpected Benefit of Defying Logic at Work and at Home, by Dan Ariely
4. Zombie Anthology -- ask Ujang for detail
5. Primates and Philosophers: How Morality Evolves, by Frans de Waal

And, oh, I start to, -whaddayacallit?-, tweeting.

What 15 bn IDR Can Make

If I had 15 billion IDR (1.62 mn USD) at my disposal, I'd buy a new espresso machine.

With that, I can make a new brewing called espresso aspiratiano a.k.a pork-barrel, sold exclusively to Indonesian lawmakers.

There Is Something About Bagel

I was sitting in a bagel shop this bright mid-morning with Lintar. Overlooking an intersection in a typical suburb scene, you can always tell some of people's psyche from traffic and city landscape -- the way Sartre did on New York city some decades ago. Or, you can do it by observing simple things like a cup of coffee and donut, like what Umar Kayam did on the same city.

And if you come to think about it, I guess 95 percent of our life and thinking is spent for things that are trivial and, quite simply, light, in Kunderan sense. Like bagel with sun-dried tomato shmear -- or a lone old man sitting behind me with his iPad on, reading probably today's WaPo's gripping stories on retaliative killings in the southeast neighborhood.

All these make the idea of politics is getting harder to comprehend. It gets me thinking why people with vast resources in his/her hand are interested in politics. After all, a bagel and a cup of coffee cost you about two bucks and they can make your day.

Maybe, for them, it is a game worth playing and winning. But for what? Is evading tax a good game? Is crushing many people's hopes for a long-awaited reform a game worth playing?

Those politics and the following rhetoric also tend to suffocate. I am recently reading the biography of Marx (Karl, not Groucho, nor Richard). Putting him into perspective as a human being, albeit brilliant, really lifts up the heaviness of Marxist ideology. With politics, the complexity of a human's mind is wrapped into talking points and, in many cases, guns. Of course, this is not just the case for Marx, but also for many others brilliant minds whose thoughts are evolved into political movement.

Enough said. Moral of the story is that, perhaps, even Noam Chomsky and Gary Becker need to sometimes just have good bagel and coffee.

In the meantime, let the Cafe play jazz rock and roll to you, now. This time, double LP of Exile on Main St. by The Rolling Stones.

A Short Note

It's been quite awhile. We, the baristas, are busy doing something else -- like twittering or discussing Indonesian public debt somewhere else. Kate, I believe, is planning to visit DC this summer. She wants to see The Phillips Collection.

Maybe it is time for Naryo to start delivering his kind of brew. But he said that he is not yet confident about it and still needs some time to master his skill on wit and rhetoric (and conspiracy theory) under tutelage of our friend Haryo Aswicahyono.

We'll be back with another economic serving soonish. I know Ape is working on something about the monopolistic nature of medical doctors' market in Indonesia.

In the meantime, why don't you spend some time in this long weekend pondering this Oxford University's All Souls College essay exam?

Don't Tell Kate

that three of her five full-time baristas just have had a rendezvous in a bistro and rather obscured cafe far away from Salemba.

It's labor day, for crying out loud.

On Good Coffee, Jazz, and Economic Data

Let us discuss those things this Cafe loves to talk about.

First, coffee. Finally New York City took their coffee seriously. This is actually a problem for almost all of American cities, that is, low per capita good coffee places. Come on, if you think Illy is the best coffee you can get, then you're in a serious need for better taste caffeine.

Unlike their counterparts in Europe, America needs much more good coffee -- and bread, I must add.

Second, jazz. Brad Mehldau is about to issue a new album, Highway Rider (HT: Sisil). It looks promising and you can listen to some of the sample here. Mr. Mehldau is one of Cafe Salemba's favorites for contemporary jazz --along with Joshua Redman and Branford Marsalis, to mention some. Of course we also listen to Vampire Weekend and Arctic Monkey, while on Lady Gaga, there's been a wide disagreement amongst us.

In this new album, apparently Mr. Mehldau is back to his old style as in Largo album. He seems indeed really good in expressing the melancholy of journey in life.

Third, economic data. Google launched visualization of the World Development Indicators subset (HT: Tyler Cowen). Any serious development economist must have been familiar with this data set at one point or another. The visualization is fun too. You can now see how good (or bad) Indonesia is, relative to other countries, using a real data --not an appeal to emotion.

(Not) the Java Jazz

I've overheard that the Java Jazz Festival 2010 was disappointing.

Well, I am not sure if it's true. But anyway, you still have us, the Cafe, keep playing the jazz as we know it.

Here some for you, a real cool (and touching) piece from Dave Brubeck's Allstars Quintet, The Jazz Ambassadors of US Army Field Band, and The Four Sons of Dave Brubeck, played the medley of Unsquare Dance, Kathy's Waltz, Take Five, Blue Rondo ala Turk, and Happy Birthday, honoring Dave Brubeck at the Kennedy Center, December 2009.

And John and Toni who, again? :-D

Happy Birthday, Village Vanguard

Yesterday, the Village Vanguard had its 75th anniversary.

To celebrate, Cafe Salemba plays some memorable live recordings from that mecca of jazz. Here is the line-up and you can listen to the youtube link we put on the song's title:

1. Sonny Rollins' Old Devil Moon, from the album A Night at the Village Vanguard, 1957
2. Bill Evans' Alice in Wonderland, from Sunday at the Village Vanguard, 1961
3. John Coltrane's Spiritual from Live! at Village Vanguard, 1961
4. Brad Mehldau's Monk's Dream from The Art of the Trio 2, Live at the Village Vanguard, 1997 (sorry, no youtube link found)

Enjoy and please don't spill the coffee over the last AER you just read.

Econometrics Agony

Agony is when ManU/Liverpool/Chelsea/Arsenal lose to one and another --depends on what team you root for.

But for ones who ever do econometrics exercise for their paper, few beat the definition of agony in a short haiku by Keisuke Hirano that appeared in the highly recommended Angrist and Pischke's Mostly Harmless Econometrics.

T-stat looks too good
Try clustered standard errors --
Significance gone

OK, it's not as depressing as infamous Hemingway's six-word story ("For sale: baby shoes, never worn."); but trust me, if you ever work with regression and robustness test, you would share the pain.

What To Do Against Big Boys

OK, I haven't had time to have coffee at the legendary murkycoffee at Clarendon and now they had closed the cafe down and moved to near Chinatown. But this op-ed by its former owner Nick Cho, is worth to ponder.

But if Starbucks brings one of these new concepts to Washington, I'll be among the first in line. To me, Starbucks is only a problem if the quality of their coffee gets worse, and this new spinoff might help it get better. (If they want to compete with the likes of Victrola and other great third-wave coffee bars, it's going to have to get a lot better.)

I hope the coffee wars help nudge the caliber of all coffee upward. Just because you're not a corporate behemoth doesn't mean you serve delicious brew. The dirty little secret of most independent coffee shops is that they don't know how or don't care to serve high-quality coffee. They believe that furnishing their shops with comfy chairs and knowing the names of their customers' dogs is all that matters.

Bottom line: competition is good. And if you have the right taste of (real) espresso, burger as good as Ray's Hell Burger, or rigorous research methodology; you shouldn't worry about Starbucks, McD, or any "imperialist" field of science.

Banality of Serial Bombings

The latest bombing incidence in Jakarta made me think to reread some economic literature on (rational) suicide bomber, --there are some out there--, but somehow I don't feel like doing it. The serial bombings is still always a disgusting and damned act, but it is now becoming banal, in a sense that it is no longer a surprise, fails to spread excessive fear, and somehow beats the dead horse.

So let the police does their CSI homework, may they identify and capture those bastards as they did in the previous incidents, and life goes on. To show that we are not easy to be scared off, the cafe still to play some jazz. Here are three Miles Davis' albums in a row: Kind of Blue, Sketches of Spain, and Miles Davis Live at Carnegie Hall.

Keep jazzin', folks.

HBS, Hilarious B-school

Do you know how the HBS students made the school pay for the BMW they rode to school? Or the difference between Sloan, Kellogg, Wharton, and HBS?

I did not until I read this book, Ahead of the Curve: Two Years at Harvard Business School.

To give you some idea, it's written by Philip D Broughton, an Englishman, former Paris correspondence for British The Daily Telegraph, holder of undergraduate degree in Classics from Oxford, who decided to give up journalism for MBA at HBS even without knowing how to run Excel on the first day of the School. In short, a page-turner hilarious account with strong hint of typical Englishmen wits and dark humor on life at one of world's most prestigious B-Schools.

Recommended for summer reading and for those who contemplate to take B-school or live business and corporate life.

Cultural Explanation Gone Nowhere

In 1977, Mochtar Lubis thought that Indonesians are hypocritical, unaccountable, feudalistic, superstitious, artistic (sic!), and some other bad traits.

In 2009, Rhenald Kasali thinks that Indonesians suffer from ten negative "economic culture" (whatever it may mean). He believes that Indonesians love to: bypass (regulations), engage in conflict, be suspicious to each other, insult each other, be photographed (sic!), mobilize mass violent acts, be shameless, be populist, set unnecessary (bureaucratic) procedures, and procrastinate.

My take: I am not convinced at all -if not to say that I don't buy it- for the following reasons.

First, so far I do not see neat working definition for each of those adjectives they used.

Second, I do not see systematic empirical efforts and findings to justify those assertions --let alone considering they take the nation's population as their unit of analysis.

Third, compared to what (nations at what period)?

Good Scot

My favorite Bagehot of The Economist asked which Scots are Good Scots; and gave three options: Andy Murray, Susan Boyle, or Gordon Brown.

That's easy. All of them. But still the best Scot so far is Bond, James Bond.