Pulau Tikus

The following NGS article on the trade on exotic animals did not reflect very well on Malaysia and Penang in particular.

On September 14, 1998, a thin, bespectacled Malaysian named Wong Keng Liang walked off Japan Airlines Flight 12 at Mexico City International Airport. He was dressed in faded blue jeans, a light-blue jacket, and a T-shirt emblazoned with a white iguana head. George Morrison, lead agent for Special Operations, the elite, five-person undercover unit of the U.S. Fish and Wildlife Service, was there to greet him. Within seconds of his arrest, Anson (the name by which Wong is known to wildlife traffickers and wildlife law enforcement officers around the world) was whisked downstairs in handcuffs by Mexican federales, to be held in the country's largest prison, the infamous Reclusorio Norte.
…
For nearly two years Anson fought extradition to the U.S., but eventually he signed plea agreements, admitting to crimes carrying a maximum penalty of 250 years in prison and a $12.5-million fine. On June 7, 2001, U.S. District Judge Martin J. Jenkins sentenced him to 71 months in U.S. federal prison (with credit for 34 months served), fined him $60,000, and banned him from selling animals to anyone in the U.S. for three years after his prison release.



If the judge thought a ban on Anson Wong would work, he was mistaken. Shortly after his arrest, Anson's wife and business partner, Cheah Bing Shee, established a new company, CBS Wildlife, which exported wildlife to the U.S. while Anson was in prison. His main company, Sungai Rusa Wildlife, continued to ship despite the ban. Now that he's free, Anson has launched a new wildlife venture, a zoo that promises to be his most audacious enterprise yet.
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Situated in the trendy Pulau Tikus ("rat island") section of Penang, Sungai Rusa Wildlife might easily be mistaken for a hair salon. No wider than a family garage and unidentified, it's one of dozens of units along a quiet strip of retail shops offering tummy reduction, skin care, and spa treatments.
…
One day in late December 2007, Anson's black Mercedes-Benz pulled into Penang International Airport and picked up two of Malaysia's top wildlife enforcement officials, Perhilitan's law enforcement division director, Sivananthan Elagupillay, and his boss, Deputy Director General Misliah Mohamad Basir. The officers had flown in from Kuala Lumpur for a press conference launching Flora and Fauna Village, now a joint venture between Penang's forestry department and Anson Wong and Michael Ooi's enterprise.
…
Anson had long boasted his government influ­ence. Now he had the open support of both the Penang government and Malaysia's wildlife department. Misliah's presence was ironic. During Operation Chameleon Misliah had been the wildlife official in charge on Penang. She signed his CITES permits. Within four years of Anson's arrest, she was promoted to director of Perhilitan's law enforcement division, and by 2007 she'd been given the department's number two job.



I wondered what Misliah thought of the man who had smuggled so much endangered wildlife right under her nose.



"He is my good friend," Misliah giggled, sitting behind her desk in her spacious office at Perhilitan headquarters. She was a plump little woman, hardly more than a round head wrapped in a Muslim's white tudung scarf. She was swaddled in a sky blue shawl over a baju kurung, a long blouse and sarong, and wore petite brown sandals. Her voice was honestly the sweetest I'd ever heard.
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Malaysia's second highest wildlife law enforcement officer speaks of her country's most notorious illegal trafficker like a doting aunt.



"People say, 'How can you give him his license?' " A smile wreathed Misliah's face. "He was a very bad boy, but if we don't give him a license, he would just do it anyway." This way, she said, they could keep their eye on him.



To this day Misliah vouches for Anson. "Anson Wong has carried out his business legally and complying [sic] the needs and requirements under the domestic law. He and his business in peninsular Malaysia have been monitored closely by this department," her office asserted in a written statement to the press in 2008.

She was also in favor of legalized tiger and bear-bile farming. "Why not?" she asked me.
Misliah Mohamad Basir, so inconspicuous, seemingly so benign, is one of the most powerful wildlife decision-makers on the planet. On her watch Malaysia has become a global trafficking hub.
…
Last August Misliah responded to allegations of a corrupt relationship between her department and Anson Wong: "As far as Malaysia is concerned, he abides by local laws and has the necessary licenses," she said. "What he does outside the country is not our concern."



After that article was published, a follow-up in Foreign Policy:


Things didn't begin to change until January 2010, when National Geographic published a profile I wrote of Wong, detailing his government connection and his new plans to exploit tigers. The outcry by both the public and journalists in the Malaysian press was immediate. (Malaysian newspapers and television are state controlled, which makes it difficult for journalists to criticize the government directly -- but they are free to disclose foreign reporting about Malaysia, such as my story.) In the course of the past year, the Ministry of Natural Resources and Environment announced a revamp of its wildlife department, promising to rotate senior officers every three years. It stripped the department of key powers and is in the process of transferring Misliah, who is now also under investigation by the Malaysian Anti-Corruption Commission. While international wildlife NGOs were cautious about causing trouble in Malaysia, they have provided invaluable advice to the country's government, including the parliament, which passed the first overhaul of its wildlife law in nearly four decades this summer.



As a result, when Wong was caught with a suitcase of boa constrictors, he didn't get away with it. The Malaysian government revoked his business licenses, shut down his zoo, and seized his entire collection of animals, including his Bengal tigers. In November, a judge sentenced him to five years in prison, an unprecedented term for a wildlife trafficker in Malaysia, and a stern sentence for animal smuggling compared to current standards anywhere else in the world.



Interestingly, Pulau Tikus was translated as ‘Rat Island’ I suppose to make the imagery complete although the Malay language doesn’t really distinguish between rat and mouse. I used to think of it as mouse. Some pictures of Pulau Tikus at above link. There’s a great Hokkien Mee place there - my mother and her friends refer to this place as the ‘soup miser’.

Natural experiment?

As abhorrent as this is, some economist is going to think that it’s a wonderful “natural experiment”:

The vanishing began Wednesday night, the most frightened families packing up their cars as soon as they heard the news.

They left behind mobile homes, sold fully furnished for a thousand dollars or even less. Or they just closed up and, in a gesture of optimism, left the keys with a neighbor. Dogs were fed one last time; if no home could be found, they were simply unleashed.

Two, 5, 10 years of living here, and then gone in a matter of days, to Tennessee, Illinois, Oregon, Florida, Arkansas, Mexico — who knows? Anywhere but Alabama.
The exodus of Hispanic immigrants began just hours after a federal judge in Birmingham upheld most provisions of the state’s far-reaching immigration enforcement law.        
…

Grocery stores and restaurants were noticeably less busy, which in some cases may be just as well, because some employees stopped showing up. In certain neighborhoods the streets are uncommonly quiet, like the aftermath of some sort of rapture.

Drawn by work in the numerous poultry processing plants, Hispanic immigrants have been coming to Albertville for years, long enough ago that some of the older ones gained amnesty under the immigration law of 1986. But the influx picked up over the last decade, and the signs on Main Street are now mostly bilingual, when they include English at all.

What the new immigration law means on a large scale will become clearest in a place like Albertville, whether it will deliver jobs to citizens and protect taxpayers as promised or whether it will spell economic disaster as opponents fear.

Critics of the law, particularly farmers, contractors and home builders, say the measure has already been devastating, leaving rotting crops in fields and critical shortages of labor. They say that even fully documented Hispanic workers are leaving, an assessment that seems to be borne out in interviews here. The legal status of family members is often mixed — children are often American-born citizens — but the decision whether to stay rests on the weakest link.        
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Mr. Orr said there were already signs that the law was working, pointing out that the work-release center in Decatur, about 50 miles to the northwest, was not so long ago unable to find jobs for inmates with poultry processors or home manufacturers. Since the law was enacted in June, he said, the center has been placing more and more inmates in these jobs, now more than 150 a day.

Of course, placing people in work is a lot different from making sure they keep working. Afterall what can we make of this experience?

How can there be a labor shortage when nearly one out of every 11 people in the nation are unemployed?

That’s the question John Harold asked himself last winter when he was trying to figure out how much help he would need to harvest the corn and onions on his 1,000-acre farm here in western Colorado.

The simple-sounding plan that resulted — hire more local people and fewer foreign workers — left Mr. Harold and others who took a similar path adrift in a predicament worthy of Kafka.
The more they tried to do something concrete to address immigration and joblessness, the worse off they found themselves.        

Mr. Harold, a 71-year-old Vietnam War veteran who drifted here in the late ’60s, has participated for about a decade in a federal program called H-2A that allows seasonal foreign workers into the country to make up the gap where willing and able American workers are few in number. He typically has brought in about 90 people from Mexico each year from July through October.

This year, though, with tough times lingering and a big jump in the minimum wage under the program, to nearly $10.50 an  hour, Mr. Harold brought in only two-thirds of his usual contingent. The other positions, he figured, would be snapped up by jobless local residents wanting some extra summer cash.

“It didn’t take me six hours to realize I’d made a heck of a mistake,” Mr. Harold said, standing in his onion field on a recent afternoon as a crew of workers from Mexico cut the tops off yellow onions and bagged them.

Six hours was enough, between the 6 a.m. start time and noon lunch break, for the first wave of local workers to quit. Some simply never came back and gave no reason. Twenty-five of them said specifically, according to farm records, that the work was too hard.

Pardon me

But did these guys just offer up a definition of a bubble?

When rapid credit growth or other indicators of financial excess accompany asset price increases, the authorities should employ stress tests to measure the effects of changes in credit conditions on asset prices, economic activity, and financial stability.

Instead of seeking to identify bubbles, the authorities should simply ask whether current financing conditions are raising the likelihood of sharp reversals in asset prices that are disruptive to economic activity.

Serial numbers

One thing that the cops were asking for after we got broken into was the serial numbers of all the stolen items. This is one thing that I never recorded, after all in monetary terms the things we lost didn’t add up to all that much, especially when the technology became outmoded after several months.

However, there may be an externality argument for keeping these serial numbers in the following sense: If the items are recovered or traced through pawn shops, it helps make a case against the accused, i.e. writing down serial numbers may lead to lower crime rates.

Yeah, not too convincing but then so are the deterrent effects of capital punishment.

Why taxing the multimillionaires makes sense

Especially these losers:

Just last week, Léo Apotheker was shown the door after a tumultuous 11-month run atop Hewlett-Packard. His reward? $13.2 million in cash and stock severance, in addition to a sign-on package worth about $10 million, according to a corporate filing on Thursday.

At the end of August, Robert P. Kelly was handed severance worth $17.2 million in cash and stock when he was ousted as chief executive of Bank of New York Mellon after clashing with board members and senior managers. A few days later, Carol A. Bartz took home nearly $10 million from Yahoo after being fired from the troubled search giant.        

This is what “pay-for-performance” has given us:

“It’s a great irony that spectacular failure is rewarded lavishly,” John J. Donohue, a professor at Stanford law school and the president of the American Law and Economics Association, told me. “It is a terrible mistake to set up a structure where the top person walks away with millions even if the company is laid waste by their poor decision-making, yet this is what’s happening. It’s a shocking departure from capitalist incentives if you lavish riches on the losers.”

Yes, and those advocated pay-for performance would use as an excuse: “But it wasn’t implemented correctly.” Right - the only time it can be correctly implemented is in the rarefied world of theoretical models. Principal agent models should confined to the trash bin or dedicated to a journal called Journal of Pay for Performance and Why It Only Works in Models.

What’s changed

I don’t want to leave the house.
I dread coming back to the house.
I want to carry everything that is left untaken with us all the time.
I want to hide stuff instead of leaving them out.
I want to double bolt our doors, strengthen our windows.
I can’t bear to look at the window he broke.
The places he’s stepped.
I want to move.

Update on Euro vs US

Some updates on questions I had for myself in a previous post:
I had wondered if the difference between the Euro and the US as a monetary union was solely because states in the US were somehow different from the Euro countries. VoxEu had an argument that this is the case although I am not entirely convinced:

For an idea about how to solve this dilemma it might be useful to look at the US. The US states have many sovereign powers that give them a great deal of financial discretion. They have the power to establish their own tax systems and spending powers. Many states are legally required to balance their budgets, although this is often meaningless in a dynamic sense if they don’t have to fund future obligations. In addition states cannot file for bankruptcy under the US Bankruptcy Code.

So how do the states guard against default and preserve their access to capital markets? In spite of their well-advertised budgetary problems the US states do have access to capital markets and at generally favourable rates. The reason is institutional. Most states give debt service a constitutional priority over other expenditures.

This means that the “sovereign” debt has to be paid out of revenues before other obligations. There are some minor exceptions. In California and some other states for example education funding has a prior claim on revenues – probably a good thing if it prevents them from undermining their long-term growth prospects. This mechanism does not prevent fiscal problems from arising. The problems of states like California are well known and they are severe. But fiscal problems become sovereign political problems, not threats to the stability of the US. It should be noted that their debt levels are quite small relative to sovereign nations.

This point is brought up again in another VoxEu post:

Tom: Well, what I meant by that is a commitment mechanism. The analogy I drew was with the U.S. states. It's well known that many of the U.S. states, some of the biggest ones, like California, Illinois, have faced significant fiscal problems and significant fiscal imbalances. And yet they still have access to capital markets at quite favorable rates. The question is why. The answer is that for most of these states there is a constitutional commitment to service general obligation bonds before all other claims on the tax revenues of the governments of the states.

This kind of takes the issue of fiscal brinksmanship off the table. U.S. states are not allowed to go bankrupt, to file for bankruptcy. They constitutionally have to honor their debts first before they pay the police and firemen and the other local government workers.

That imposes an automatic austerity regime. If the fiscal situation gets out of balance in a given state, it's a problem - and it is very much a problem in some states like California - but it's a problem that is a local problem. It's not a problem for the union.

My only issue is that even if brinkmanship is taken off the table where in the constitution is it explicitly ruled out that it cannot be put on the table. And isn't a constitution subject to amendments?