Not sure this is exactly how a news channel should be describing happy children....I am a liberal yes.....so it may seem that I am baiting foxnews unnecessarily....but this is appalling as a headline and a photo...
Monday, February 23, 2009
Slumdog Millionaire
Not sure this is exactly how a news channel should be describing happy children....I am a liberal yes.....so it may seem that I am baiting foxnews unnecessarily....but this is appalling as a headline and a photo...
Monday, February 16, 2009
Inflation in India
The Finance Minister cautioned against letting up on inflation. And claimed credit for containing it. What a joke!!! Inflation should not even be on anyone's mind. Defaltion is the risk. In India price declines are unlikely. But a prolonged period of low inflation is possible. As for the govt. doing anything....thats downright right stupid. Sure, they did take some supply side actions. But the major impact on lower inflation is the global crash, aggregate demand falling and commodities and manufacturing prices crashing. Finally, supply side shortages where contained by good monsoons rather than any govt. efforts.
Sunday, February 15, 2009
More on nationalisation
A couple of weeks back I put up a bank on nationalisation as the best solution. See Nouriel Roubini and Mark Richardson endorsing my view in this article in the Washington Post:
No one said its clean or easy, but it is the best solution. As John McCain would say "We are all socialists now" :P
No one said its clean or easy, but it is the best solution. As John McCain would say "We are all socialists now" :P
Wednesday, February 11, 2009
On the Geithner Plan
Due to a lot of work I will be posting smaller and less frequently.
My first take on Geithner's plan: he doesn't have one!!! On closer reflection, i realise there are two possible reasons for the approach: One would be that he is afraid of hurting creditors and private shareholders of the bank....and is hoping for the best. The other is that he actually believes nationalization is the way but this is a creeping version (with this as a first step)to make it the most palatable form for US citizens to digest.
Will private investors really come in? Hardly a chance. Will this remove uncertainty? No. Can he value assets? No. Are guarantees protective of tax payers? No. However, this is better than two other options: "bad bank" buying at par, and "bad bank" buying at market price. Maybe the hope is that the economy recovers. In that case the guarantees are sufficient and more loans wont go delinquent. Eventually private investors enter. If not, as is currently the case, the system will be insolvent and we nationalize at that stage (end of the year?). Either way he can make it seem that he has no choice at that stage.
It is not often that I agree with a Wall Street Journal article but I think a quick nationalization, stripping bad assets and injecting fresh equity and handing it back to private investors is the best way. This way govt. fear mongering is removed and free marketeers are happy.
More on this later.
My first take on Geithner's plan: he doesn't have one!!! On closer reflection, i realise there are two possible reasons for the approach: One would be that he is afraid of hurting creditors and private shareholders of the bank....and is hoping for the best. The other is that he actually believes nationalization is the way but this is a creeping version (with this as a first step)to make it the most palatable form for US citizens to digest.
Will private investors really come in? Hardly a chance. Will this remove uncertainty? No. Can he value assets? No. Are guarantees protective of tax payers? No. However, this is better than two other options: "bad bank" buying at par, and "bad bank" buying at market price. Maybe the hope is that the economy recovers. In that case the guarantees are sufficient and more loans wont go delinquent. Eventually private investors enter. If not, as is currently the case, the system will be insolvent and we nationalize at that stage (end of the year?). Either way he can make it seem that he has no choice at that stage.
It is not often that I agree with a Wall Street Journal article but I think a quick nationalization, stripping bad assets and injecting fresh equity and handing it back to private investors is the best way. This way govt. fear mongering is removed and free marketeers are happy.
Sunday, February 8, 2009
The Party of Herbert Hoover returns
If the senate version of the stimulus passes, and it fails to stimulate, blame Herbert Hoover's disciples. I refer to those ideologically blinded, anti-people senators from mainly Southern states. Very specifically, Bob Corker, Lamar Alexander, Jim DeMint and Tom Coburn are so insanely blinded by their philosophy that they will burn their country for ideology.
The heart of the matter is the fear of one entity: the government. And the fear that help will foster a new democratic majority for years and more importantly (as far they are concerned), the social safety net expanding. Mr Coburn, the government which you demonise all the time employs 20% of your state's people (Oklahoma). Mr DeMint, the education spending which you deride, would help repair the crumbling schools which doubtless havent seen in South Carolina. But no, government is always bad, to be feared and to be dismissed. Balanced budgets are a holy cow. Debt will kill future generations......................
All I can say is the stimulus is poor, because it does too little, has too many tax cuts and in general poorly written. It may fail in its efforts. But the democrats shouldnt worry. A republican mayor in red Indiana loves your money. The poor would love healthcare. The middle class favors infra spending. The rich like the economy stabilised. Big business likes your plans as does big labour. Even faith based groups like some money routed through them. The democrats may suffer in 2010, but the price is small as they are likely to retain a majority in both House and Senate, and likely build formidable coalition come 2012. If they dont go for more centrist, bipartisan crap like this and shy away from their goals.
As for the party of Herbert Hoover, their path back resembles hoping for the stimulus to fail, highlighting small Pork, keep promoting tax cuts, and hope for a terrorist attack. I hope no of that happens, but history shows that thunderbolts do happen once in a while. Lets hope I am wrong, and the GOP becomes a permanent minority.
The heart of the matter is the fear of one entity: the government. And the fear that help will foster a new democratic majority for years and more importantly (as far they are concerned), the social safety net expanding. Mr Coburn, the government which you demonise all the time employs 20% of your state's people (Oklahoma). Mr DeMint, the education spending which you deride, would help repair the crumbling schools which doubtless havent seen in South Carolina. But no, government is always bad, to be feared and to be dismissed. Balanced budgets are a holy cow. Debt will kill future generations......................
All I can say is the stimulus is poor, because it does too little, has too many tax cuts and in general poorly written. It may fail in its efforts. But the democrats shouldnt worry. A republican mayor in red Indiana loves your money. The poor would love healthcare. The middle class favors infra spending. The rich like the economy stabilised. Big business likes your plans as does big labour. Even faith based groups like some money routed through them. The democrats may suffer in 2010, but the price is small as they are likely to retain a majority in both House and Senate, and likely build formidable coalition come 2012. If they dont go for more centrist, bipartisan crap like this and shy away from their goals.
As for the party of Herbert Hoover, their path back resembles hoping for the stimulus to fail, highlighting small Pork, keep promoting tax cuts, and hope for a terrorist attack. I hope no of that happens, but history shows that thunderbolts do happen once in a while. Lets hope I am wrong, and the GOP becomes a permanent minority.
Friday, February 6, 2009
Act Now and Act Big on the stimulus
As I write this, the numbers for Jan unemployment is just coming in and seems worse than most estimates. President Obama must call the GOP's bluff on this issue. No more bipartisanship nonsense. Let them filibuster if they want. To hell with Bill Nelson as well. I think that if Reid pushes a final vote a couple of Republicans will vote for it (the maine senators unlike GOP house members represent a moderate electorate). And make it big.
The tradeoff: it doesnt work, but heck it will not be noticed, when people dont see job cuts. And GOP credibility will be eroded either way. Inflation is a worry for a later time. So is pork, transparency, bigger govt. and bipartisanship. Uncertainty is there, and this bill may fail in its efforts. But all alternatives are worse. A recovery in late 2010 should save the dems from big losses in the house. Go for it. Whats the reason for a delay?
The tradeoff: it doesnt work, but heck it will not be noticed, when people dont see job cuts. And GOP credibility will be eroded either way. Inflation is a worry for a later time. So is pork, transparency, bigger govt. and bipartisanship. Uncertainty is there, and this bill may fail in its efforts. But all alternatives are worse. A recovery in late 2010 should save the dems from big losses in the house. Go for it. Whats the reason for a delay?
Wednesday, February 4, 2009
Gopalaswami vs Chawla, who's right?
Finally, some Indian story I am going to comment on.
Issue: The Chief Election Commissioner (CEC) Gopalswami recommends dismissal of a fellow election commissioner (chawla) for bias
Govt's response: He doesn't have that right. Govt. shall decide
Fali Nariman's point: CEC overreached and timing was bad
My verdict: Article 324 (5) of the Indian constitution clearly suggests that the CEC shall adjudicate. That the govt. can decide is even morally unacceptable, given the non-partisan nature of the EC. The SC should decide on the case. I believe the CEC has the law on his side. On a moral plane, it seems his dossier is complete in its case against Chawla. The reason why the above article MAY not be read as I do it, is because in the last few years, election commissioners have been appointed on a permanent basis, rather than temporary as was envisaged and followed till early 2000. Hence, it was clear that as the sole permanent commissioner, the CEC had the authority. But the amended law doesnt address the new issue of whether a permanent commissioner can be removed. My sense is in the absence of the clarification, the CEC has the right. But, the law should be amended for a non partisan panel to adjudicate and appoint commissioners.
Issue: The Chief Election Commissioner (CEC) Gopalswami recommends dismissal of a fellow election commissioner (chawla) for bias
Govt's response: He doesn't have that right. Govt. shall decide
Fali Nariman's point: CEC overreached and timing was bad
My verdict: Article 324 (5) of the Indian constitution clearly suggests that the CEC shall adjudicate. That the govt. can decide is even morally unacceptable, given the non-partisan nature of the EC. The SC should decide on the case. I believe the CEC has the law on his side. On a moral plane, it seems his dossier is complete in its case against Chawla. The reason why the above article MAY not be read as I do it, is because in the last few years, election commissioners have been appointed on a permanent basis, rather than temporary as was envisaged and followed till early 2000. Hence, it was clear that as the sole permanent commissioner, the CEC had the authority. But the amended law doesnt address the new issue of whether a permanent commissioner can be removed. My sense is in the absence of the clarification, the CEC has the right. But, the law should be amended for a non partisan panel to adjudicate and appoint commissioners.
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