Showing posts with label moral hazard. Show all posts
Showing posts with label moral hazard. Show all posts

Thursday, October 05, 2023

A good way to fight the reigning Bureaucracy Autocracy is with a Citizens’ Democracy, empowered by Artificial Intelligence.

By means of e.g.;


“Favoring a bureaucracy’s access to bank credit, could it be deemed to be (a soft or a hard) Kleptocracy?”

“Could you help to provide transparency on USAID?”

https://perkurowski.blogspot.com/2025/02/ai-openai-chatgpt-could-you-help-to.html


"When referring to productivity what is really measured? Is it a precise or a vague term? Can it be influenced to provide a specific message/result?"

"As a grandfather, should I be concerned about how Basel bank regulators might have shaped the future my grandchildren will encounter?"

"Does the Income Tax Credit (ITC) distort the incentives to get back to work?
If so, have you any ideas of how distortion could be eliminated or at least diminished?"

"If you had access to real time data provided by a great number of outlets and other sources, would you be able to provide reasonable inflation figures estimates without us having to incur in current time lags?"

"Would now John F. Kennedy have wanted to deliver his 1963 'Ich bin ein Berliner' speech? 
If the Berlin Wall was still up, would now Ronald Reagan have needed to tell Putin, 'Tear down this wall'?"

"Do you think that if given the necessary information in a timely fashion, you could be helpful to the US Congress in its process of deciding the federal government budget? If so, could your participation provide the citizens with more transparency on the proceedings and final budgets?"
https://perkurowski.blogspot.com/2023/10/ai-chatgpt-openai-could-you-help-and.html

"If as a consequence of US Congress not increasing the debt ceiling there’s a government shutdown, how could you assist taxpaying citizens in making sure the shutdown is managed the best way possible e.g., that what’s really most needed is prioritized?"

"Could you help implement a system that transparently monitors whether social security and pension funds have sufficient reserves; and thereby foster the understanding that helps reduce the possibility of intergenerational conflicts?"
http://perkurowski.blogspot.com/2023/08/ai-chatgpt-openai-could-you-implement.html

"Can you visualize AI being used to measure the effectiveness of governments? E.g., how tax revenues have been used in different programs; or giving updates in real time on how many are employed or contracted to deliver specific results?"

"If we compare the economy to a human body, have not regulators, with risk weighted bank capital/equity requirements, imposed a lousy diet with way too much carbs and way too little proteins? Has that not produced dangerous obesity?"

"When fighting climate change how do we avoid the systemic risk with "experts" and profiteers distorting the allocation of resources?"

"If allowing banks to hold much less capital against government debt than against other assets, does that not translate into a de facto subsidy of government borrowings that guarantees excessive levels of government debts?" "A moral hazard?"

“Suppose a virus hits a nation, and it’s evident that its mortality rate depends most on age. In such a case, is transmitting data about the total number of deaths, without discriminating by age, not a serious misinformation?”

Wednesday, October 21, 1998

Pure water and Dostoyevski

I recently had to travel to Washington on business. On the flight from Miami I was handed a small picnic-like bag that contained the modern substitute for the traditional on-board meal. I suppose this is aimed at cost reduction. For obvious reasons, which by the way are widely shared, I was never much of a fanatic of this service, so the modernization of the same is neither here nor there for me. I did find, however, that negotiating an extra bottle of wine out of a picnic bag is far more difficult that doing so out of a stewardess.

What inspired some of the following comments was the bag’s content. The bag included a bottle of pure, natural water and a “globalized” menu made up of a Manhattan deli-sandwich, Dijon mustard and Tortilla Chips.

The water is contained in a clear plastic bottle, good but costly. Its label told me that the water originated, and is bottled, in France, vintage ’98 and can be consumed safely until July 27, year 2000. (What should one do in August of year 2000?) It also included a bar code, which evidently makes logistics easier, considering the fact that the product must be transported long distances from its source to the ultimate consumer.

On the backside of the bottle, another label gave me valuable information as to its “Nutritional Content” broken down into units per serving, which in this case is exactly equal to the content of the bottle, which is 11 fl. oz. or 330 ml. The information is as follows: Calories = 0; Total Fat Content = 0 gm. = 0% of the Daily Value (DV); Sodium = 0 mgs. = 0%; Carbohydrates = 0 gm. = 0% of the Daily Value (DV); and Proteins = 0 gm. = 0% of the Daily Value (DV). All was, as one should expect from water although, curiously, no info at all was provided in respect to its purity.

While I drank the water, I read a special supplement of The Economist magazine which addressed the issue of international commerce and developed the fundamental thesis that the world should continue, come hell or high water, to develop free and open market programs. I am a sincere and avid defender of free and open market principles and if the possible benefits are analyzed in the traditional terms of "bicycles and wheat" I have absolutely no problem.

However, if this means that in Venezuela, in order to reap the benefits derived from free trade, we have to create the conditions that allow for the sale of non nutritional French water, instead of the equally non nutritional Venezuela water, something which borders on fanatism, then, perhaps, The Economist and I must be referring to a free trade or an aperture of a different sort.

As we landed in Washington, I concluded that any business or economic development policy, that leads to substitute the cost of a stewardess for the cost of a particularly expensive bottle of water, is really not adequate for Venezuela. Actually it isn’t adequate for anyone.

My arrival in Washington coincided with the annual meeting of the International Monetary Fund (IMF). This year the meeting was particularly high profile as a consequence of the global economic crisis that is already affecting many countries around the world and threatens to continue to expand.

In terms of human suffering and sacrifices, we have already begun to understand the horrible implications of this crisis. From Japan, the press relates the terrible drama of a collective suicide of three businessmen, all husbands and fathers, due to bankruptcy as a result of recession. In Venezuela, our citizens are already paying their dues as a result of the fall in oil prices. 

In Washington, I observed on a daily basis, almost to the point of nausea, the pressures applied on an otherwise apparently successful President, as a result of sins caused by possible excess in libido. Being from another country I would not want to judge their reactions but I do believe that this debate centers on the American society’s need to see to it that responsibilities are assumed (accountability is the appropriate buzz word).

Much of the discussion during the IMF meetings centered on what is called the “moral hazard”. The argument maintains that by helping stricken countries we are actually simply helping speculators to avoid massive losses and keeping them from suffering the punishment they deserve. As a result, they will surely be tempted to incur in the same errors over and over again.

All in all, the economic crisis, Clinton and the moral hazard created in Washington a real Dostojevskian scenario, reinforced by the fact that one of the TV stations, in what I considered an extraordinary sense of timing, was announcing the upcoming airing of "Crime and Punishment".

Against this background I noticed, somewhat surprised, that the faces at this year’s meeting of the IMF, were the same as those present at previous meetings, as if nothing had occurred. Could it be that Venezuela and to complement its export of beauty queens, has managed to come up with a new non-traditional export called “impunity”?

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