Limits of power

May 25th, 2009

Interesting article on limits of power, in this case Israel’s. But applies to all of us.

In the end, this is a classic study in the limits of power. Israel can have its freedom of action anytime it is willing to pay the price for it. But Israel can’t pay the price. Netanyahu is coming to Washington to see if he can get what he wants without paying the price, and we suspect strongly he knows he won’t get it. His problem is the same as that of the Arab states. There are many in Israel, particularly among Netanyahu’s supporters, who believe Israel is a great power. It isn’t. It is a nation that is strong partly because it lives in a pretty weak neighborhood, and partly because it has very strong friends. Many Israelis don’t want to be told that, and Netanyahu came to office playing on the sense of Israeli national power.

An Israeli Prime Minister Comes to Washington Again by George Friedman

Junk email and economy

May 9th, 2009

I am happy to inform the world that I have started getting junk (unsolicited) email offering me jobs in the software industry. I suppose my resume is still haunting one of those job sites.  I used to get these emails by the tonne, then it stopped. Now it has started again.

Does this mean that the economy is improving? Or has the IT industry finally woken up and recognised that I am indispensable to the industry and need me back to help them fix what is ailing IT? Other that these two, I can’t think of any other reason.

May be these could be the topic of your PhD thesis:

  1. Existential, Meteoroligical and Epistemological link between unsolicited job offers in tech industry and boom/bust cyle in modern economy based on worthless fiat currency. (Economics)
  2. Simulation of link between frequency and timing between junk email and state of economy using non linear, coupled Vlasov-Maxwell equations. (Inter disciplinary program between Economics and Physics)
  3. Junk email as catalyst for decline in mental health, increase in megalomania and self-aggrandizement (Psychiatry)

So many papers, so many thesises.

By the way, I am still waiting for all the things that were promised to me via email - my fortune from a Nigerian Princess in exile in Monaco, my six pack abs, my rock hard bottoms, free viagra (how did they know ?), vacation in exotic locations, free money for doing just about nothing, free psychiatric drugs (again, how did they know?), ……….

Who succeeds in politics?

May 7th, 2009

It is election time. Every one and their dog has an opinion on how the nation should be run, who is corrupt, who is not, etc. This election has been a bit different as it seems like another direction changing election. This, even though it appears to be a very bland election, at least on the surface, with no real issues to debate.

One interesting direction changer possibly is the number of new candidates contesting the election. Some kind of a barrier has been broken. Probably an Obama effect being felt in India. Yes, even a novice can! seem to be the refrain. Which may be a good think, in the short run.

It is easy to forget how hard Obama worked and for many years towards the Presidency. That brings me to the matter at hand. There is an annoying trend especially this election cycle. Annoying, but hopefully not very harmful. This annoying trend seem to be fueled by the ease with which people can email and send documents over the internet. The educated and the elite among us seem to take politicians and their profession very lightly. To some it seems like–all you need is a good man or woman to contest and win, every thing else will fall into place.I don’t think we reserve this kind of naive contempt for any other profession.

So here is my thought on who succeeds in politics, if at all. I believe only two kinds of politicians succeed — either a Karunanidhi/Jayalalitha (K/J) type or a Rahul Gandhi/Rajiv Gandhi type. (For this discussion it does not matter whether you vote for them or like them or not).

What does it take to succeed in politics, assuming you have the natural abilities? You need a vast array of teams, organisations, contacts, networks, etc. etc. How long does it take to get all this? A very long time indeed. It takes years of toiling, speeches, plotting, begging, cajoling, coercing, etc. to even have a shot at doing anything worth doing in politics.

K/J, for example, have been in politics for years. Both are considered accomplished politicians, good administrators, nationally respected players. But they got here after spending much of their time in isolation, in opposition, sometimes even declared politically finished. Yet they have survived and stayed relevant. In power or in opposition, they have complete control, or as much as humanly possible, over their party, the state machinery, etc. They have to use all these just to stay relevant, but they also have to constantly work to expand their base, party, network, organisation, etc.

Now ask yourself, with all this–natural ability, control over the machinery and party which are absolutely required to get anything done–are they able to get all that they want? Clearly a big no. In fact I would be surprised if they are able to deliver a fraction of what they probably dream of doing.

The point is, it takes a lot of deliver even a little bit. Especially in a complex, chaotic and democratic society like India. Come to think of it, it takes a lot to deliver a bit in any society. Otherwise all dictators would be delivering amazing societies. (I am just playing along with people who think politics or govt can deliver everything in society, if only we had good political leaders. Govt/politics has a very important yet limited Or limited yet important role in society. There is only so much it can or should do. Even though are things it must do and do well.)

Now take the example of Rahul or Rajiv Gandhi. It may be too early to judge Rahul Gandhi. But Rajiv Gandhi (RG) we can judge. RG was not the most naturally gifted politician of his times. Yet he did succeed in many ways. Much of the reform, IT revolution in India, talk about youth and twenty first century started when RG was Prime Minister.

He succeeded because what K/J worked to build–party, network, contacts, power, etc.–RG inherited. Which means even if does not know how to do something, there would be enough competent veterans around him, at his service, to get the job done. Of couse this is not to take anything away from RG or other similar politicians who inherit. It takes talent to manage anything, espcially a massive organisation like the Congresss or the Prime Minister’s office.

The morale of the story as I see it is, if with all this power, K/J or RG can deliver only so much, how much can some middle class or rich, more importantly Independent candidate deliver? Have you estimated the time it takes for a group of middle class citizens, with no prior experience in politics, to establish a new, functioning and election-winning party. (By the way, in my opinion, with all due respect, if your party cannot win elections, then it is no different from any another NGO.)

These are some serious questions all arm chair politicians should consider seriously. Otherwise we cheapen politics and the fact how difficult it really is to succeed in politics.

Thanks Daniel

May 7th, 2009

Thanks to Daniel, my friend, IT entrepreneur, volunteer at Chennai City Connect and Janaagraha, I am back to blogging. Thank you Daniel for your prodding and help.

How money works, or should work

November 14th, 2008

I am a big fan of the late Prof Milton Friedman. But in this case I have to go with Prof Frank Shostak. Check out Shostak’s Can Friedman’s Money …., especially the part where he explains gold standard and boom-bust cycle.

One of my most cherished possessions is a letter I got from Prof Friedman. I had proudly mailed him an article my friend Marc and I wrote on international sanctions on India and published in the Economic Times.  He, in his own polite manner, congratulated us and said he had argued the same in an article in 1952. I guess some things need to be repeated year after year, decade after decade.

What is the difference?

October 30th, 2008

This is a serious question. I am not simply trying to provoke.

Saw a piece on TV on fake money being pushed into India by some really bad guys via Nepal. No debate here about what should be done to them since the fake money is used to buy weapons and recruit bad guys who harm Indians. Catch them and punish them badly. Very badly.

The questions I have are about the currency.

Question: what is the difference between fake Indian rupee and the rupee printed by RBI?

Security advisor M K Narayanan said in the piece, goes something like, “though the issue is serious, there is no threat to the economy”.

I assume he means that the amount of fake money coming into India is small, compared to the amount already in circulation.  Hence the dilution is not much.

Something like the milkman adding water to milk and diluting the value of the milk you get. If he adds a lot, milk is really worthless. If he adds a few drops, not a big problem.

Question: If the milkman is RBI, and RBI is adding a lot of paper money to the system, what happens to the value of the currency that already exists in the system?

Question: why is this not considered a threat to the national security or at least a threat to the economy?

Seriously, what is the difference?

Real Money Please

October 20th, 2008

This is for my friends R&G. They seem to be falling for the same trap like many others while trying to assign blame for the current economic woes. For the next few days we will continue to hear more cries for handing over more powers to central planners to “regulate”.

Few things I find amazing.

1) Only in the wonderland of regulation - you find people who had the power to do something, yet they can’t/don’t do what they claim they were supposed to do as our protectors and saviours, screw up badly, then go back to their boss (taxpayers) and say, “I screwed up badly, I need more power, more money, more authority, more ….” This they get to do again and again, and their bosses fall for the trick every time.
2) People who set the fire (dot com bubble, asset bubble, etc. with loose monetary policy and fairyland credits) to the barn (banks and financial institutions) keep pouring more fuel over the still hot embers; now want to play the role of the fire service, with more money, power, people and bigger fiefdom.

I promise you that once you understand monetary policy, your interpretation of world events (at least in the economic sphere) will never be the same again. Check out the following. Very much applicable in India or any other country you live in.

Happy enlightenment!

Earlier attempts: Why International Sanctions Could be Good News for India

October 10th, 2008

One of our earlier attempts at public policy.  Marc and I were
walking around Ann Arbor, Michigan in 1997 or 1998, right after the
nuke blasts in Pokhran.  Much of the opinion in India was in a whining
mood and breaking out into ‘We are the world, we are the victims’ song.
It was as if IMF, World Bank, Japan, US and the rest of the world owed
us their money.

We decided to take a different approach.  Make use of the
opportunity and get rid of politically directed government to
government or quasi-government to government aid. 

The following was published in The Economic times.  Interestingly,
lot of what we said then has come true.  India, from what I understand,
is now a donor to IMF. The immorality of this can be debated elsewhere.
Read on ….

Why International Sanctions Could be Good News for India

by Raj Cherubal and Marc Cooper

The five nuclear tests recently conducted by India have triggered a
wave of international economic sanctions. From the cutoff of aid by
Japan to the pledge of the United States to thwart disbursement of aid
by multilateral agencies such as the IMF and the World Bank, the
international community has determined that India must be punished for
the Pokhran blasts.

Conventional wisdom claims that poor nations require economic
assistance to lift themselves out of poverty and that by depriving a
poor nation of desperately needed capital that nation will suffer
enough economic harm to change its course of action and bend to the
will of the sanctioning nations. We believe that by displacing the need
for private capital inflows and delaying free market reforms, perpetual
international aid usually causes more harm than good. It is also our
contention that the elimination of handouts will, in the long term, not
hurt India, but could actually help by compelling its political leaders
to accelerate economic liberalization measures which will lead to
enhanced growth.

International aid has created a legacy of dashed hopes, arrested
economic development, and dependency. The sorry history of the IMF
highlights some of the many problems that plague the aid industry. As
recently noted by Bryan Johnson and Brett Schaefer of the Heritage
Foundation, more than 50% of the nations receiving funds have shown no
economic improvement and one third are worse off. At some point it must
be acknowledged that not only has years of economic assistance failed
to help these nations, but that it may have even harmed them. Such aid
permits the political leaders of these nations to continue promoting
failed socialists economic practices and avoid implementing vital free
market reforms that would lead to long term economic growth.
Additionally, capital flows which are directed by political means
rather than by the market are all to frequently misallocated and thus
do little to improve the plight of the nations receiving aid.

Also, international aid can be capricious. Donor nations are
primarily driven by domestic political concerns not the requirements of
the needy nations. So aid can be summarily cutoff just when it is most
needed and thus can be an unreliable source of capital. There are also
questions about sovereignty. Aid usually comes with strings attached
and desperate nations are frequently compelled to placate the donor
countries. India finds itself in this predicament. This naked blackmail
is demeaning to a proud nation such as India and also reveals something
about the motives of the donor countries.

India is a poor nation due to lack of capital. A loss of an
important source of capital, unless replaced by other means, will make
India poorer. While this appears troublesome at first glance, we
believe that it could present a positive opportunity. Faced with the
loss of politically directed capital, India must turn to the private
international market to replace this loss. In order to do so, it must
enact key economic reforms to become attractive to investors, and to
assure them that such investments will be safe from capricious
government interference. With its stable democracy, abundant natural
resources, and a huge middle class which is very much Westernized,
India should have no trouble in attracting enough private investment to
more than offset the effects of sanctions, provided that the requisite
economic reforms are implemented

In the past few years, India has taken some encouraging steps in the
direction of economic liberalization. Such steps have resulted in
strong growth of the kind that is necessary to lift the average Indian
citizen out of poverty. Yet poverty remains a persistent problem so
further reforms are required. These reforms include clear and secure
private property rights, relaxed capital controls, reduction in
government interference in the private sector, removal of restrictions
on foreign ownership of Indian companies, etc.

Many of these measures will face intense political opposition, but
this is where the imposition of international sanctions could help
India’s leaders. By claiming that such measures are necessary due to
the sanctions, the Indian government can use the international
community as a scapegoat and gain political cover. This political
dynamic is just what is required to break the stranglehold of
entrenched bureaucratic and protectionist interests and to accelerate
the pace of economic liberalization.

Instead of being viewed as a harbinger of economic troubles, the
sanctions that are being imposed on India could represent an historic
opportunity. The only path to long term economic growth is via capital
accumulation. If sanctions compel India to enact reforms required to
attract private capital and reduce its dependency on international aid,
than sanctions could be a blessing in disguise.

One Wall Down

September 15th, 2008



One Wall Down

Originally uploaded by Chennai City Connect

The wall blocking the footpath near the petrol bunk is down. Was surprised to see it being pulled down, wires/pipes underneath being removed.

I was in line (long) waiting for precious diesel. By the way, Long Live Central Planning! Viva artificial shortages!

I saw a guy (one removing the pipes and wires) explaining to a passerby “the footpath is going from there to there, along this path”. (He was motioning this with his hands. I assume that’s what he was saying. And not, “the people who did this, I will drag their bodies from there to there, through my ex-wall”.)

Picture on the right. Due to my amazing camera work, you can’t see the guy, next to the bike repair guy, who is pulling the wires out. The big man in blue stripes came in between.

One problem though. The “free air” equipment is gone. It used to be on this side of the wall. I have nostalgic memories (redundant?) of waiting in my car while the air guy fills my tires. “34 in the front, 30 in the back”. While waiting for my credit card reciept. Anxiously waiting to hand over Rs 4 coins (sometimes Rs 5) to the “free air” guy when he is done with my front tire on the right. Notice that he finishes that tire last so he can make an extra buck. You also want to show your generous nature to the poor dude so you keep the booty ready. So much in life is pre-planned and we don’t even realise it. Tango at the bunk.

Will those good old days come back? Is this the beginning of the revenge of the Goddess of Wall Things ?

Sign boards (police ones) are gone. BSNL box gone near Shastri Nagar junction. Unfortunately now there is a hole instead. I saw a scooter guy stuck in that hole.

Scooter guy: 1
BSNL: 0

Good to see Corp responding so quickly.
One wall down. Many more barriers to go.

Footpath in the media

August 20th, 2008

Now that we are having a Footpath Bachao Andolan in Chennai, with more and more individuals and groups trying to address this issue, let me add to the mix. Some write ups and media coverage and shameless self promotion by moi. Well anything to be able to walk endlessly and aimlessly, without getting run over or falling into a ditch, in my city.

Good footpaths speak of a civilisation in Deccan Herald

Corp to accept complaints on footpath woes in The Times of India

300 Kilometers of sidewalk
in Chennai Today

Pedestrian-friendly road model taking shape
in The Hindu

Lattice Bridge Road in a blog by the same name