Don't do it!

Nobel laureate Gary Becker has a debate with Richard Posner about drunken driving enforcement on their blog. If I didn't read it incorrectly, Gary Becker, a Chicago school economist, supports DUI enforcement. I detest most of government interventions in people's daily lives. Yet, I can't agree with Gary Becker more.

OK, I confess. It is not easy to be wrong to side with a Nobel Prize winner. Still, I have my reasons. The one big reason why I think strict enforcement of DUI is needed is that negative externalities are just too severe to be let for individuals to deal with. Both Messrs. Becker and Posner underestimate the magnitude of DUI's negative externalities. A reckless drunken driver hurts not only him and his family, but also the other party involved in the accident. That could be a promising young man on his way to invent something great, a loving father bringing home the presents for the holidays, or any of our family members. The worst of all is that no one sees it coming. Life is halted for no reason. Hell, Mr. Posner even compares DUI to consumption of trans fats. At least we see the heart attack coming in that suicidal behavior. But killed by a drunken teenager?

A similar case of favorable government intervention is the enforcement of wearing helmets when riding motorcycles. When I was in college, I used to ride a motrocycle to school everyday. It was the best transportation choice before MRT was built in Taipei. At that time, helmets were not required. I wore it from time to time. Although I got tickets all the time, it was never because of not wearing a helmet. In retrospect, I feel lucky that I wasn't involved in any major accidents. But it hardly went a day without seeing some serious motorcycle accidents in the newspaper. Those killed or brain-damaged in the accidents were most likely young people. Just when people seemed to get used to it, some miracle happened. The legislature passed a law requiring helmets to be worn at all time when riding motorcycles. In 1997, the first year the law went into effect, accidents dropped from number 3 to number 5 in the list of top 10 causes of death in Taiwan. They stayed at such ranking ever since. In addition to saved lifes, cases of brain damage also dropped significantly. The cost of enforcing the law is simply not comparable to the benefits society gains.

After personally witnessing the miracle, I for the first time saw the benefits of government intervention. Remember that yours truly is a hard-core libertarian.

(Picture: CrimProf Blog)

Not a TV junkie

It is good to have a break. Finally I have a chance to clean up my DVR, which has been loaded up with episodes after episodes of TV shows that I couldn't watch because of the tense end-of-quarter schedule. Curling up on the couch and watching Nip/Tuck nonstop was not only relaxing but also got me thinking again about the differences between Asian and American TV dramas.

Unlike American shows, Asian dramas tend to be less complicated and more predictable. Sometimes a character might sob for several minutes to reveal his/her inner emotions. Whenever the director pulls the lens and lets the character do this kind of acting, I can't help but fall asleep. I guess I am used to American dramas' fast pace and unforeseen twists. Being fast-paced doesn't mean it is shallow. I remember this line from CBS's Jeiricho, "We were both born on the third base. Don't pretend you hit a triple." Had this line been in an Asian drama, it would have been featured extensively and probably repeated several times. It just flashed by in Jeiricho and I've never heard it again.

Why the dramas are still an ocean apart while the people live more and more similar lives? It is not that Asians aren't fast-paced. People in Hong Kong might seem to run on the streets in the eyes of people in L.A. My theory is that Americans are more advanced in entertainment business, which itself is the product of advanced capitalism. Americans are entertained in various ways. TV dramas have to compete with football games, Nintendo, Hollywood movies, Larry Kings, and even Jerry Springers. If they don't get juiced up, they will be punished severely in terms of viewership. As a consequence, writers(unlike their Asian counterparts, they work in a team) have to squeeze more lines into a single episode. Just compare the reruns of Seinfeld and Friends and you will see the differences.

My fellow Taiwanese are in baseball ecstasy this year. After nearly two decades of professionalization, baseball finally becomes a daily stable of TV programs. Yet, baseball in the U.S. is deemed as a less exciting sport than football or basketball. Good thing is that Asians have begun to taste capitalism. Gradually they will shift from hardware providers to software makers to content creators. Just look how successful Japanese animations are right now. Asian pop culture will some day be as good as Americans', but for the time being, Americans still rule.

Black Ships have arrived

Private equity giant Carlyle Group made a splash in Taiwan with the announcement of the acquisition of ASE, the largest semiconductor testing and assembling company in Taiwan. Private equity firms are the new kings in financial markets all over the world. There are plenty of merits for a public firm to go private. For one, they can avoid more and more tedious filing requirements. Private firms are also free from Wall Street's myopic analysts. It is not new for American private equity firms to purchase Taiwanese companies, but Carlyle's move signifies another burden faced by Taiwanese companies: restriction of investments in China. ASE is said to get around the 40% rule by selling itself to Carlyle and becoming an American company.

The 40% rule says that Taiwanese public companies cannot invest more than 40% of their equities in China. It is obviously a political decision since China is still hostile toward Taiwan. China has more than 800 missiles targeting Taiwan. Sadly, a model I am currently working on says that the restriction doesn't work. I'll post another one once my model is finished.

I am not satisfied with the explaintion why ASE wanted to be acquired. I am more inclined to believe that many of Taiwanese companies are undervalued at Taipei Stock Exchange and private equity firms just can't pass on these good deals. It is a wakeup call for the officials regulating financial markets in Taiwan. If they don't do something about it, i.e. becoming more transparent and less restrictive, the number of companies they are overseeing will shrink at a very fast rate.

Commodore Matthew Perry brought the Black Ships to Japan in the 19th centurty. Instead of being wiped out from the earth, Japanese determined to reform and had successfully transformed the nation into a world power under Emperor Meiji. Black Ships literally triggered the modernization of Japan. Guess where Commodore Perry was from? United States! Do you see the Black Ships coming, people in Taipei?

(Picture: www.wikipedia.org)