Tom Pepinsky

Author: tompepinsky

  • Advising Adventures

    My (jm) new job is really great.  I’ve been having so much fun meeting students and families as they come into the office for advising about going to college in the US.  Every person is a little different and there are all sorts of interesting questions which come up.  And the staff is a rare combination of nice, fun, very knowledgable, and good at what they do. 

    Yesterday was an interesting day.  There’s a company called the Linden company which provides educational services, and they run things like college fairs throughout the world.  So yesterday they brought reps from 17 American schools to MACEE, where they got a briefing on Malaysian education,  Malaysia in general, and visa processing.  This was all very good for me too.  Then the American Ambassador came over to give some welcoming remarks (my boss insisted on introducing me because he went to Oberlin too so that was fun), and then reps from local Malaysian colleges showed up.  Then all the reps traded business cards, glossy brochures and course catalogues for a while which was very amusing to watch.  We walked around trying to get the local colleges interested in having us come to their campuses and do advising sessions.  We’ll see if anyone gets back to us.  A few interesting statistics: of Malaysians, male Indians are by far the most well educated and Indian women are by far the least educated; as a whole the Chinese are most educated and make up 60%  of the students going to the US;  Michigan has the largest population of Malaysian students- mostly due to a partner program with Western Michigan U; there are about 26 million Malaysians, only 4% are over the age of 65 and 94% are literate.

    After all this was over, there was a college fair for kids and parents at a nearby hotel in the evening.  This was only for the American schools, and our staff basically sat outside and registered people as they came in.  There were 241 people who attended which I am told was pretty good.  So that was fun, and I got pulled aside to do a little on the spot counseling as well.

    This morning I had a meeting with the Cultural Attache at the American Embassy.  Tom met her and her staff at a lunch for Fulbrighters last week, and they were excited to hear that I’m a musician.  It was quite interesting getting into the building, I’ve never been in a US Embassy before.  Actually, I was walking down the street looking for it and getting worried because I couldn’t spot it- then I realized I was standing under a 15 foot wall with barbed wire and two lanes of the road were blocked off and I was alreadythere.  I had to leave an ID at the outside gate, go through two metal detectors, send my bag through once and have it searched by hand twice, and leave my cell phone at the guard house.  My guess is that they do this so nobody can take pictures of the inside with their phone for security reasons.  Then you have to wait for an escort who finally takes you into the right part of the building.  So the attache and her staff were all really happy to have me there and seem like they will have some musical things for me to do which is awesome.  There is actually a music school here, so they are going to arrange a talk for me, and they want to send both TP and I around Malaysia to do "outreach" programs.  They have these centers all around the country called Lincoln Corners, and it sounds like Tom may be able to talk about his work and I can give a spiel and play a little at the various branches.  This would be really fun, and a free way to travel around! 

    I have lots more interesting tidbits from students I’ve been meeting, there will be more to come soon!

  • Need a Dissertation Topic?

    For anyone out there looking for a dissertation topic, I (TP) have got one for you.  During the Asian Financial Crisis, there was naturally a lot of fussing about the correct way to cope with the problems.  All of the big policy makers and economists were involved from all around the world, and there was no shortage of reasonable people having reasonable disagreements about very fundamental issues in economic policy making.  So, why did countries adopt the policies that they did?  If economic theory was too confusing for economists and sundry policy makers, how did countries get to where they did?  It’s part of my dissertation to explain why.  But, what about the way that people framed the discussion in foreign countries and in multilateral lending institutions like the IMF?  Why were they so married to one particular ideology?  My theory is that many of these people advocated particular policies–free capital markets and floating exchange rates–for  no other reason than the words "free" and "floating" sound good, and they invoke images of freedom, liberalism, and capitalism.

    In a sense, I feel like Edward Sapir, a linguistic anthropologist who has whole school of thought partially named after him–the Sapir-Whorf Hypothesis.  Before he went to graduate school, he was working as an insurance adjuster in Peoria, Illinois.  This was in the 20s and 30s, when people were first driving.  He noticed that a lot of his claims involved folks who were driving around with empty gasoline cans in their car who were shocked–Shocked!–when these cans exploded during accidents.  The reason that they always gave for this was that the can was "empty."  You know, empty, with connotations of inert, void, whatever…doesn’t sound like something that would be likely to explode, except if that something is gas vapors.  This led him to the thought that maybe the way we speak (language) constrains what we do (culture).

    So when the Asian Financial Crisis hit, Western governments and international lending bodies were clambering for the affected governments to get rid of their crony economic systems and impose real liberal capitalist systems.  Get rid of monopolies, deregulate state-controlled industries, things like that.  All good things, no doubt about it.  So long as we’re doing that, we might as well make sure that we have free capital markets and floating exchange rates.  You know, free, floating, liberal, open, etc.

    To borrow the phrase of a famous economist, the problem is that "trade in widgets is not like trade in dollars."  That is, there is no economic theory that says that free capital flows and floating exchange rates are better than capital controls and pegged currencies.  For trade in widgets and gadgets, we have the theory of comparative advantage and the general equilibrium theory of the market.  It helps to prove, both in terms of common sense and through rigorous mathematics, that free trade in goods among countries is superior to trade barriers.  It makes everyone better off.  If you have a monopoly and your economy is tanking, get rid of that monopoly.  There is no corresponding theory for trade in dollars, rupiah, ringgit, euros, whatever.  The closest thing we have is the axiom that some exchange rate regimes are good for some countries at some times, others good for other countries at other times.  For that reason, a tanking economy with fixed exchange rates does not necessarily get better by floating.  The irony is that Mahathir Mohamad in Malaysia bucked the international discourse for open capital accounts and floating exchange rates by fixing the exchange rate and closing the capital account.  Despite outrage from the West, Malaysia got better.  Indonesia followed the discourse, and got hammered so bad that Soeharto eventually had to step down.

    The point is that these particular economic policy decisions are not necessarily good or bad, but that they have trade-offs.  Why were so many in the international community so adamant about one rather than the other, regardless of those tradeoffs?  (This includes in particular Deputy Treasury Secretary Lawrence Summers, lately of Harvard University fame.)  Of course, other economists, notably folks like Nobel Laureate James Tobin and wacko liberal Paul Krugman, called for the capital controls and fixed exchange rates before even Malaysia thought of it, but few listened until after the dust had settled.  I certainly have no way of proving my theory, or even of forming a reasonable hypothesis through which to test it.  If you know how, you’ve got yourself a dissertation.