Tuesday, 28 May 2019

What Modi will do now?

Narendra Modi's spectacular win in the general elections 2019, and returning to power by an astonishing margin -- defying expectations, leaving the political opposition gutted and securing nearly two-thirds of the Lok Sabha. This election has proved how wildly popular Modi really is. The big question is: What is he going to do with that? He will probably continue along the same path.
  • But there is a sizable chunk of India that voted against Modi, and many members of this anti-Modi crowd are deeply worried about his having a stronger hand.
  • They see India as increasingly divided along caste and religious fault lines and an emboldened  Modi will send India farther down the path of becoming a religious Hindu state, which could be dangerous for minorities.
  • Hindu extremists did very well in the election. Though Modi has not publicly used their same language, he has also done nothing yet to separate himself from them.
  • Modi is not a soft liner. Modi’s deepening reliance on Amit Shah is a sign of the agenda ahead. Amit Shah is the man who recently referred to illegal Muslim immigrants as termites.
  • Modi will come under pressure from within BJP to deliver on contentious planks of the party including building Ram temple over the ruins of a destroyed mosque in Ayodhya, abrogate Article 370 for Kashmir and removing special protections that allow India’s minority Muslim community to follow its own system of family law.
  • Modi has no reason to deviate from the core agenda, because he received an unprecedented mandate despite the poor economic record and social disharmony.
  • India’s path forward during Modi’s second term hinges on just who the real Modi might be.
  • Those who studied Modi (68) say he is a complicated man: isolated, ascetic, trusting few, close to even fewer; a blend of populist, nationalist and a self-made success story. He is passionate about his Hindu beliefs and committed to economic development.
  • After 5 years, the economy is not doing well and Modi is aware of how economy could define both his legacy and his future political fortunes.
  • Modi has demonstrated desire to take his place on the global stage as the leader of world economic super power.
  • In Kashmir, Modi might try to tighten control. So far India’s attempts to stamp out dissent have bred only growing resistance. Any further pressure put on Kashmir could mean more tension with Pakistan. Part of Modi’s election surge came from his appearing tough on Pakistan, trading military strikes across the border. The brinkmanship caused anxiety around the world, and Modi may well decide to continue that stance.
  • Given the electoral victory he just won, he is unlikely to see any reason to change what has worked for him.
  • At the top of his priorities is the urgency to create more jobs, and that is likely to require new laws to grant the government the power of eminent domain to seize land for companies to use to build factories.

India is at the whim of one man

This election has produced the strongest government India has had. Even Jawaharlal Nehru did not have as much control over his party as Modi does. There was something surreal about this election. The fact that we've reached a point where truth does not seem to matter and that is a dangerous point for a democracy because democracy survives on the fragmentation of power. When people trust each other and distrust their leaders, you get democracy. When people distrust each other and completely trust their leaders, you get dictatorship. We are at the second moment right now. Armed with full majority, non existent opposition and tamed institutions -- Modi will continue with renewed vigor his hate filled destructive and disruptive policies. Only empty coffers, economic, agriculture and unemployment  problems will control him to certain extent.

Saturday, 25 May 2019

Morality in a free market

Are the markets moral? Should we expect them to be? Moral according to whom? 
If they’re not moral, are they immoral? Amoral? Or value-neutral?
  • Morality describes the codes of conduct put forward by a society. It can refer to a system of conduct to which all rational persons, regardless of culture, would subscribe. Morality deals with our sense of fairness and our sense of responsibility to others. Implicit in morality is the idea that there are right ways and wrong ways to act.
  • A market is any structure under which commerce takes place: the purchase of land, stocks, airline tickets, vegetables, sporting events, whatever it may be. These structures begin as neither moral nor immoral. They are indifferent as water. Markets are meant simply to be vehicles for finding the most efficient way to balance supply and demand. The freer the market, the less encumbered by regulation, and the more efficient it should be. 
  • From a social standpoint, unfettered markets can lead to situations most of us would consider immoral: vast populations of have-nots, a ruined environment, plutocracies and other dystopian scenarios.
  • How can we influence markets so that they can help us build the kind of world we believe we should have?The misalignment between markets and morality -- public good versus individual rights. How markets should be governed is a discussion about capitalism itself. Capitalism has brought so much to so many in so short a time. Is it perfect? No. 
  • Even as our free-market system has raised living standards to levels once unimaginable, the backlash against the markets has gotten louder. The Occupy Wall Street movement is the most visible example. Most of the protesters say they aren’t against the markets. They’re against injustice and inequality and that the system is rigged against them. They say it’s criminal for a CEO to make several hundred times the earnings of an average employee. 
  • It’s disgusting for a company to shut down a plant, throw workers out on the street, and, destroy a town’s economy for no reason other than that a cheaper source of production has been found elsewhere. Only government can make the markets work in the public interest and not in their own interest.
  • Something in our society is out of whack. The stock market is up but people don’t have jobs. The gap between the rich and everyone else is growing. There’s an international super-class traveling the world in private jets, living in a series of penthouse apartments, while the rest of us can only shake our heads, grow embittered, and soothe ourselves with reality programs that exploit some of society’s most pathetic individuals so that we can feel superior to somebody, thereby mitigating our doubts about our own positions in the socio-economic hierarchy. 
  • All systems tend to perpetuate themselves, to act in their own self-interest until curbed by some other force. John Ruskin believed that honesty wasn’t just the best policy; it was the only policy that would allow an economy to steer clear of chaos. Many corporations have learned that corporate social responsibility isn’t just charity. It fosters long-term value. Business is the most powerful force in the world, and when approached in a certain way, it promotes both economic and social good.
  • Honesty fosters trust, and trust allows markets to function. When trust fails and when no bank would lend money because it didn’t trust the credit-worthiness of any potential counterparty -- markets crash.
  • Those with great power and wealth have a responsibility to use it for good. Having accumulated more wealth than several men could use in several lifetimes, Mr. Bill Gates has devoted his fortune to initiatives aimed at eradicating disease and poverty in some of the world’s most backward geographies. 
  • In the liberal democracies of the West, the free-enterprise system is not designed to enrich the few at the expense of the many. And the markets, in the purest sense, aren’t listening. They tend to follow mathematics, not morals.You can be as ambitious as you want; you can achieve as much as your abilities allow; but you have to play by the rules. And the rules make the markets more open, more transparent and more fair.
  • In the context of larger issues: the individual versus the group; equality of opportunity versus equality of outcome; and the difference between legal and moral, which ones do we place at the top? Ayn Rand would tell that the individual is all. By contrast, a honeybee would tell you that group welfare trumps everything.
  • We’re individuals, but we’re part of and we have the ability to affect the group. We do it at the ballot box and we can do it in the markets. In investing we can choose to restrict our investments to companies that exhibit behavior consistent with our own morality.
  • Rule breaking is an example of personal wrongdoing, not evidence of a corrupt institution. Can we blame markets for thieves like Bernie Madoff? Do markets create greed, along with motivation?
  • Look at Madoff’s sixty-billion-dollar swindle. He caused tremendous damage. He bankrupted successful businesses and charitable organizations. He reduced families to penury. His own son committed suicide. But anyone who considers Madoff a representative money manager is mistaken. He is simply a criminal.
  • There are situations in which entire industries have acted immorally.The sub-prime lending crisis of 2007-08. Banks pushed people to borrow more than they needed, more than could really afford, because the banks made the most money that way. Some of the biggest culprits were deemed “too big to fail,” and were granted immunity for their mistakes. 
  • A moral society seeks the best opportunity for all its members. It protects the weak while allowing ambition to express itself fully. A corporation seeks to maximize its profits while staying within the law and doing right by its customers, workers and the community in which it undertakes its activities. Some corporations take it as a point of pride to create excellent working conditions, encourage social commitment, and to act as a moral society in miniature.
  • Whether markets seek to be moral or not is irrelevant, because they have proved an effective tool for improving lives. As Deng Xiaoping once put it, “It doesn’t matter if the cat is black or white as long as it catches mice.”
  • The idea that everything in life can be reduced to supply and demand may not be the most valid way to look at all human interaction. At what point does that premise begin to corrupt the social fabric?
  • In New York, Washington DC etc a cottage industry of line-standers has now grown up and you can hire people to stand in line for you in case you have more money than time. It creates a positive good for two people -- the line-stander and the playgoer.
  • In Washington DC -- line-standing companies employ homeless people to stand in line for clients who want the limited seats available for Congressional committee hearings and Supreme Court sessions open to the public. Lobbyists and others are often happy to pay for access. From a market standpoint: supply and demand. Socially? It kind of doesn’t smell right.
  • At Disney World, people in wheelchairs and their families don’t have to wait in long lines for rides. They’re placed at the front of the queue. That seems morally correct. So some people of means have paid disabled strangers to pose as their family members. This is immoral and dishonest.
As long as we would prefer to pay more for a good that is produced in accordance with our values than pay a lower price for an article that is made by taking advantage of those without the means to redress unfair conditions, we will be moving the markets towards a more just, more moral position. The fact is we aren’t always willing to do that. Regulation can fix some of the problem, but personal responsibility -- knowing what you are investing in and buying -- can play a bigger role.

Principles aren’t principles until they cost you money.

Wednesday, 22 May 2019

Caste consciousness

Caste system is a phenomenon related to Hinduism in particular. On the basis of caste, it is fixed at the time of a person’s birth that whether she/he would have higher or lower status in social hierarchy. Castes were first classified according to their occupation. But due to access to wealth, power, and privilege, Brahmins and Kshatriyas started to use religious sanctions to monopolize their position. 

Caste system in India is so rigidly deep-rooted in its socio-cultural and religious life. But in reality it is no God-send virtue to be followed by the people. It has had several exploitative and discriminatory effects on our social order throughout the ages. As a by-product, caste system has given several other social ills to the society such as untouchability.

A Brahmin’s caste pride comes with humiliation for other castes is both the base and superstructure of Indian society. Blindness to caste does not take away the social, political and economical privileges one gets because of one’s accident of birth in a particular upper caste. Anyone belonging to a hierarchically privileged caste is bound to get the advantages of his caste location, willingly or unwillingly, consciously or unconsciously.

To be born in a privileged caste is not anyone’s fault but to refuse to even acknowledge unearned benefits’ accruing due to one’s caste and thereby claiming that the very mechanism that enforces them is absent in one’s life is not right. For the people belonging to the marginalized lower strata of this system, caste is about humiliation, deprivation, oppression and imposed identity.

To be oblivious to caste and indifferent to the caste associations of friends, employees and associates, is no longer enough in today’s caste-conscious India. Caste blindness is an affectation available only to the privileged; the lower castes cannot afford to be indifferent to caste.

Caste discrimination affects millions people and involves massive violations of civil, political, economic, social and cultural rights. Caste systems divide people into unequal and hierarchical social groups. Those at the bottom are considered ‘lesser human beings’, ‘impure’ and ‘polluting’ to other caste groups and subjected to untouchability practices. Untouchables, known as Dalits are often forcibly assigned the most dirty, menial and hazardous jobs, and many are subjected to forced and bonded labor. Due to exclusion, they have limited access to resources, services and development, keeping most of them in severe poverty.

Caste consciousness is not so rigid in Indian diaspora as in India. They have caste feeling but not use it in day to day practices but use it flexibly without causing any harm or ill treatment. Caste identity has been central to the ways in which Indians overseas organised their society. They still look to marry within caste and endorse caste system. People change their names and surnames to get away from low-caste identity. Caste is something that is embedded in the psyche of a person. So, as long as a person's cultural roots are present in a society with caste system embedded in it, this practice is bound to continue. Thus, a second generation emigrant is to have lesser belief in the caste system and so on. Thus caste consciousness is very much present in much of the Indian diaspora.

Although India has a more rigid mechanism of caste system, the struggle of BR Ambedkar was able to grant the lower castes with the incentive of reservation, which is mostly absent in other countries. In Oct 2018, Kerala government has appointed 54 non-Brahmin priests including 7 dalits to the Cochin Devaswom Board. Earlier, 36 non-Brahmins, including six Dalits, were appointed to the Travancore Devaswom Board.

The Constitution mandates that no citizen shall, on grounds only of caste or race, be subjected to any disability and restriction. Nehru had hoped caste would disappear from India’s consciousness. Law can only provide protection from exploitation but it cannot bring attitudinal change in so-called upper castes. The young and modern generation is perhaps the only hope in bringing about the real meaning of social justice in our country.

Wherever a Hindu goes he takes his caste along with him .. Dr Ambedkar 

Monday, 20 May 2019

Mockery of Exit Polls

Almost all exit polls predicted a landslide victory for the BJP under Prime Minister Narendra Modi. Some pollsters such as News24-Today’s Chanakya and Aaj Tak-AxisMyIndia predicted the BJP’s win to be bigger than even the 2014 Lok Sabha polls. Only ABP-Nielsen has predicted the BJP to fall short of majority.
Stock market operators are paying TV channels to produce exit polls that will move the market in the days between the exit polls and the actual results and then move the market rapidly in a different direction once results are out. So whatever the exit polls say take them with a pinch of salt - people have advised.

Within 60 seconds, Rs 3.2 lakh crore were added to investor kitty as exit polls see NDA win. The highly exaggerated Exit Polls have become another tool to make money and the rich are getting richer at the expense of the gullible small investors.

ABP giving 56 seats to MGB in UP, India today giving 65 seats to BJP in UP. This is the conclusion of Exit polls!

The BJP-JDU alliance is set to sweep the Lok Sabha elections in Bihar winning minimum 38 out of the 40 seats, according to the India Today-My Axis India Exit Poll. The RJD-Congress led 'Mahagathbandhan' may only bag maximum 2 seats, as per the exit polls. Is it believable?

West Bengal Chief Minister Mamata Banerjee has made a stunning allegation against TV channels’ who broadcast their exit poll predictions on Sunday evening. She said that predictions favouring the BJP was a part of a larger ‘game plan’ to ‘manipulate or replace thousands of EVMs through this gossip.’

Telegu Desam Party chief N Chandrababu Naidu dismissed the predictions of the exit polls, pointing out that past experience show such analysis usually turn out wrong. "Time and again exit polls have failed to catch the people's pulse. Exit polls have provIndia ed to be incorrect and far from ground reality in many instances..." Mr Naidu tweeted.

Last week, Arnab Goswami had slammed his rival TV channels particularly India Today for ‘leaking’ their exit poll data that gave the NDA only 177 seats, a loss of 177 seats compared to 2014, they claimed. Faced with widespread condemnation, India Today had later clarified that numbers flashed on its channel were part of the channel’s dummy data.

"I believe the exit polls are all wrong. In Australia last weekend, 56 different exit polls proved wrong. In India many people don't tell pollsters the truth fearing they might be from the Government. Will wait till 23rd for the real results," tweeted the Congress parliamentarian Mr Shashi TharoorHe was referring to Australian Prime Minister Scott Morrison winning what was seen as an unwinnable election, cementing his authority over the Liberal Party and giving him the muscle to end a decade of instability that has seen a revolving door of prime ministers.

National Conference chief Omar Abdullah tweeted "Every single exit poll can’t be wrong! Time to switch off the TV, log out of social media & wait to see if the world is still spinning on its axis on the 23rd". His tweet that did not outright cast doubts on the exit polls that is likely to be seen as a harbinger of the actual results.

Basis Exit Polls, shares of Adani Group companies have shot through the roof:
    Adani Green Energy: 17%
    Adani Gas: 16%  
    Adani Power: 14%
    Adani Transmission: 9% 
    Adani Ports & SEZ: 8%
    Adani Enterprises: 15%

There is no advantage of conducting Exit Polls!  It creates unwanted anxiety to people and politicians. Only TV channels make money.

Many political analysts see opinion polls as an evil in democracy. Opinion polls have bandwagon effect on the fair election process. Opinion polls project what voters are thinking and what their mandate will be. It doesn't direct the voters to go for the majority view or to neglect the minority. Opinion polls are accused of being manipulated and sometimes being wrong. Opinion polls can be manipulated by arranging favorable questions. It is not the duty of the media to keep the moral of the party cadres high. Media is accountable to the people not to the political parties. Indian citizen has the right to freedom of speech and expression and ban on the opinion polls will curtail this right. So argument against opinion polls holds no moral ground. In a country like ours, opinion polls and exit polls are much needed to enrich our healthy democracy. But yesterday's exit polls seems to have been manipulated by ruling BJP in order to keep UPA and allies in disarray so that in case of any marginal opportunity they could knock away the chance to form government with the help of President Kovind.

Sunday, 19 May 2019

Modi's failures

Modi term 2014-19 is coming to an end shortly. While his government's claimed successes are debatable, his failures are true, glaring, hurting and devastating. Excepting few of his cronies, some ruthless businessmen and corrupt bureaucrats, no one seems to be happy.

The most audacious, hare brained and secretly hatched economic reform which not only destroyed Indian economy but devastated rural and informal economy. GDP slowed by two points, millions of jobs were lost instantly and at least 100 deaths reported standing in bank queues for exchange. Demonetization achieved nothing but nation saddled with unintended consequences. Even after two years unintended consequences are still surfacing incessantly hurting poor people. Demonetization is not an economic reform but a war on people of India.

As the country just a few months away from the Lok Sabha polls, reforms like demonetisation and GST are headed to look like bigger failures than they actually are due to the flow of black money and tax evasionThe unrest in the economy (lack of jobs, credit crunch etc) and the emergence of more black money makes the reforms demonetisation and GST look like a bigger failure. The tax burden has gone up after the implementation of the GST. Besides increased cost, delays in input tax credit to exporters and scarcity of credit pushed people to delay or avoid taxes by dealing more in cash. GST was implemented to widen the tax net, decrease tax evasion and reduce red tape in the tax collection. The ambiguous GST norms and processes have not only failed to bring in the promised efficiency but encouraged the creation of black money, increased tax burden and decreased business productivity. Less productivity is the key reason for lesser job creation. Any tax reform is as good as it is implemented. 

For months this government argued in the Supreme Court against citizens having a fundamental right to privacy. It argued for surveillance and labelled privacy an ‘elitist concern’. In parallel it struggled to explain why it ordered the mandatory linking of Aadhaar to all possible services from railway tickets to school admissions. The Supreme Court ultimately had to step in and severely curtail the domineering designs of the project.

The Indian banking sector has become fragile and marginal with the rising non-performing assets (NPAs) and decreasing credit base. Currently gross NPAs @24% are in excess of  Rs.11,00,000 crores. An ideal banking system is one that enjoys depositors' trust and investors' reliance. To evolve into such a system requires improving conditions around weak corporate governance, poor assets quality, insider abuses, weak capital base, unprofitable operations and overdependence on public funds. A long way to recovery for PSU banks. Although several NPA loans were granted during earlier UPA2 regime these loans turned NPAs during Modi regime and Modi is guilty of not taking timely steps and preferred to go on blaming predecessor government.

Economic statistics are vital to public debate and policy making. Modi government is guilty of suppression of key statistics to revision of GDP numbers and fiddling with budget numbers, the Central government's data management has come under sharp attacks of economists and social scientists in recent times. In 2015, the base year for the GDP calculation was changed from 2004-05 to 2011-12 significantly raising the GDP growth rate from the earlier estimates. Real GDP or GDP at constant (2011-12) prices...showing growth of 5.1% during 2012-13, and 6.9% during 2013-14 - the corresponding figure in the old 2004-05 series was 4.7% and 4.5% - and took India's growth rate higher than China. Strangely, no back series data was released by the CSO then as it led to an upward revision in growth for the UPA years. Then, on Jan 31, 2019 the CSO released fresh data, revising GDP growth upward: From 7.1% to 8.2% in 2016-17 ( the year of demonetisation) - the highest in the decade! and from 6.7% to 7.2% for 2017-18 (the year of GST and post-demonetisation). Many eye brows have been raised as these revised estimates were surprising and did not square with related macro-aggregates.

Farmer suicides rose sharply during the Modi government’s tenure. Modi government imported wheat and pulses without thought – leading to the prices of domestic produce crashing. Farmers have resorted to at least three large scale agitations thrice this year. Not a single representative from the BJP Government deigned to meet the agitating farmers near Parliament in New Delhi.

For the last one year, India has seen "the dreadful phenomenon" of falling labour participation rates and rising unemployment rates. At 7.2%, India's unemployment rate in Feb'2019 is worst in 29 months. The continued y-o-y fall in the labour participation rate in 2018 and 2019 indicates a deeper or a more sustained problem ailing India's labour markets. The total number of employed persons in February 2019 is estimated at 400 million against 406 million in the year-ago period and 407.5 million employed in February 2017. All this is pretty bad news for the Modi government ahead of the general elections 2019.

Modi and his cohorts changed the terms of a deal to acquire fewer jets for three times the price without following the stipulated procurement procedure. When cornered with questions, the government chose to attack the opposition and cite rules of secrecy which were contradicted by the French president. The Rafale controversy attracts questions because of the selection of a private party (read Anil Ambani), without any qualifications and experience except for an obvious proximity to the Modi, as an offset partner, displacing experienced HAL, a PSU.

There has been an enslavement of certain sections of the media which simply choke on any criticism no matter how innocuous of the prime minister and the BJP president. If a channel is less than pliant, it is blacked out, its premises raided, or the offending journalists removed outright.

The parliament is an inconvenience to Modi government which prefers to rule by fiat and ordinances. PM Modi rarely attends parliament, and when he does he gives electoral speeches than to answer questions raised on the floor of the House.

The promised Lokpal is deliberately forgotten by Modi, that an irate Supreme Court has to direct action. Lokpal was appointed after 4 years and 10 months of assuming office and few days before election schedule 2019 was announced.

A high-powered committee headed by Prime Minister Narendra Modi has shunted out CBI director Alok Verma, three weeks before his retirement. Congress President Rahul Gandhi attacked the government ahead of the crucial meeting and said Modi was in a "tearing hurry" to "sack" Verma because of the Rafale deal.

No incidents of hate crime were reported in 2010 and 2011, but over the eight years since 2012, 29 persons have been killed in cow-related hate violence, 25 of whom were Muslims. Only one-third of the cases –  the police filed cases against the victims under cow-protection laws. Attacks based on race, religion, caste or ethnicity in India often occur when the attackers believe that they have political cover and will not be prosecuted and punished. It is crucial for the state to respond immediately and establish the rule of law, otherwise people lose faith in the justice system, and there is risk of a cycle of revenge and violence. Political patronage of criminals destroys institutions, causes a breakdown in human rights protections. Modi has more than once condemned the thuggish violence of the cow terrorists, not swiftly enough. His rebukes have been too gentle for his partisans are just ignoring him. Unless Modi shows he means business, the support of BJP leaders will only continue to embolden the Muslim-hating mobs.

Kashmir remains the biggest Modi’s failures. Kashmir valley's population is over 9 million of which 96% are Muslims. 60% of the Valley’s population is below the age of 30 with shrinking job avenues. Kashmir remains the most militarized zone in the world.Half of Indian army ~7 lakhs personnel are there in Jammu and Kashmir. There were only 150 militants in the state last year. Do we need 7 lakh soldiers to fight 150 militants? The BJP is interested in the continuation of the communal polarization situation in Kashmir to aid its larger political agenda. No political accountability, no responsibility for the mess it has created. The Srinagar by poll turnout was just 7.13% in contrast to 26% in 2014 general elections. The deteriorating conditions in the Kashmir valley is reflected by the killings of civilians by armed forces. Over 300 civilians have died in the last three years. Stone pelting on army personnel by girl students and housewives indicates breakdown of familial bonds. The Modi government is simply not interested in starting a political dialogue it promised four years ago.

India's relations with Nepal had deteriorated over the preceding years despite India having been the prime responder in the reconstruction of Nepal following the catastrophic earthquake of 2015. On the other hand, China’s influence in Nepal has been steadily rising with its recent initiatives to expand influence in South Asia. Chinese fuel supplies to Nepal helped alleviate the fuel shortage, accompanied by the commencement of infrastructure projects to help in the post-earthquake reconstruction of the country. Nepal runs the risk of being overwhelmed by Chinese investments and falling into a debt trap after allowing massive Chinese investments. Prevailing open border between India and Nepal offers potential for the smuggling-in of cheap Chinese consumer goods as they flood Nepal. India has to recalibrate relations with Nepal in the backdrop of massive Chinese FDI in Nepal, which constitutes over 60% of the total investment in Nepal in 2017-18. With a little over 30%, India lags a distant second and has to emerge with fresh strategies to counter expanding Chinese influence in Nepal.

Banks are custodians of public money. Some 31 Indians have fled abroad to avoid prosecution and these include Vijay Mallya, Lalit Modi. Nirav Modi, Mehul Choksi, Jatin Mehta etc. India is struggling to extradite these businessmen who have fled the country after defaulting on billions of dollars of bank loans. The government has compiled a list of 91 people it is considering barring from leaving India because of their involvement with companies that have defaulted. A willful defaulter is one who has defaulted in meeting its repayment obligations to the lender even when it has the capacity to pay. Some 400 Indian companies have been classified as willful defaulters. It is logical that someone accused of an offence is not allowed to leave the country because extradition requires proof of criminal offence and it is difficult to establish this beyond doubt.

Just now exit polls were announced which unanimously predicted NDA getting 300+ and UPA ~130  etc. I see many abnormalities and suspect exit polls were tweaked favoring  NDA. I guess NDA and UPA will get ~200 each (+/- 25) and regional parties get 150 seats. UPA with the support of regional parties will form government. If Congress gets ~150 then Rahul Gandhi will become PM and otherwise a consensus candidate from South or East will become PM.

Friday, 17 May 2019

A hard day's work deserves a fair day's pay

Right now, too many people are working long days for less pay than they deserve. That’s partly because of failure to update overtime regulations for years and an exemption meant for highly paid, white collar employees now leaves out workers making as little as poverty wages, no matter how many hours they work.
  • A hard day’s work deserves a fair day’s pay. That’s at the heart of what it means to be middle class in America. In 2015 President Obama announced new rule that would raise the salary threshold of workers covered by overtime to $50,400, from $23,660. The beneficiaries would be people like a restaurant manager who frequently worked 60 hours a week but didn’t get overtime because she earned $36,000.
  • That’s good for workers who want fair pay, and it’s good for business owners who are already paying their employees what they deserve since those who are doing right by their employees are undercut by competitors who aren’t.
  • A manager at a car wash when asked for his thoughts on the new rule has said: "It would get the people be paid the way they should be paid-and stop letting these companies use your labor for free."
  • Obama further said - he believes in middle-class economics, when everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules. It’s at the heart of the fundamental choice our country faces today.
  • Will we accept an economy where only a few of us do exceptionally well? Or will we push for an economy where every one who works hard can contribute to and benefit from our success?
  • Will we invest in programs that would help educate our children, maintain our roads and bridges, and train our workers for the high-paying jobs of the future? Or will we cut these programs, and decide to give more to the wealthiest persons instead?
  • The answer is clear. Let’s invest and commit to an economy that rewards hard work, generates rising incomes, and allows everyone to share in the prosperity of a growing economy. Let’s make the critical investments we need to grow our economy and strengthen the middle class.

The workman gives as much, the capitalist gives as little, 
as the nature of the bargain will admit ... Frederick Engels

Wednesday, 15 May 2019

Fake news

Fake news is a type of yellow journalism or propaganda that consists of deliberate disinformation or hoaxes spread via traditional news media or social media. Digital news has brought back and increased the usage of fake news, or yellow journalism. The news is then often reverberated as misinformation in social media but occasionally finds its way to the mainstream media as well.
  • Fake news was not a term many people used four years ago, but it is now seen as one of the greatest threats to democracy and free debate. Fake news is not a new phenomenon. Misinformation has been used by governments for ages to control public opinions for generations.
  • The rampant misuse of social media platforms to spread fake news has been a global cause for concern for misinformation shared through WhatsApp messages influences the voters.
  • Social media giants like Facebook, Twitter and Google are also under intense pressure to do everything they can to prevent their platforms being misused and manipulated, and to stop the spread of fake news.
  • Fake news does not make a person change his beliefs. Fake news only reinforces the existing political ideas and beliefs and brings out the worst impulses within us.
  • Fake news is only a catalyst, the demon is within ourselves. 
  • People tend to assume new technologies will make it harder to manipulate the truth. In reality, new technologies — from photography to the Internet — open up new avenues for faking.
  • In India three major factors drive political behavior: security, public goods and economic patronage. Security issues is not just threats of violence against your family or caste, but also about your civil rights, access to police and legal institutions. The lack of people from lower castes in courtrooms and police station has always been a barrier for dalits to get justice.
  • There are lot of poor, upper caste people who are not getting any govt benefits. They feel aggrieved and that is where the fake news comes in. Political parties like the BJP are using this predisposed belief of being 'left out' to get people to vote for them.
  • BJP is pushing extremely violent messages in their WhatsApp groups, because those things work in getting their voters to the polling booth. They are targeting people who are going to vote for BJP anyway. On the other hand Congress and other parties, which are trying to stitch together much larger coalitions, have a much harder job. 
  • With increased accessibility to smartphones and internet, the dissemination of fake messages has become more decentralised and harder to monitor. The government is freaking out because they can no longer control it.
  • At present the BJP has the first mover's advantage. BJP is more organised and can influence people -- at least motivate their own voter to go to the polls by sharing something racist or bigoted. Every political party is trying to do the same thing. Once they catch up, the influence of fake news will wear out. 
  • Pushing fake news for power & profit, promising to tickle the soured and stale addictions many have developed to deflection, deception and denial is the domain of disreputable organizations. 
  • Purveyors of deflection, deception and denial play on people's weaknesses, their cultivated thirst for contentious reporting, their inability to apply critical thinking and practice the proven ability to evaluate their sources of media before positions are assumed and actions are taken. All of this dysfunction, based on faulty information provided/collected.
  • Nations have been compromised and wars, some of them world wars, are started when propaganda is permitted to advance, unchecked. Lying for a profit is right up there with prostitution, drug running and gun trafficking in terms of profitability and this harmful practice has been around just as long. 

Tuesday, 14 May 2019

Modi, the most foul-mouthed PM

Modi’s ouster on 23 May will be India’s fitting reply to the most foul-mouthed PM.

Modi needs to be warned that he’s guilty of anti-national activity in trying to 
ride on sacrifices of Army & CRPF martyrs in a dirty election campaign.

- Mani Shankar Aiyar

Sunday, 12 May 2019

Anxiety or Worry - the difference

Anxiety is your body’s natural threat response system. When your brain believes you are in danger, it sends out a series of signals to your body, resulting in the fight-or-flight response. Worry is a component of anxiety symptoms. 
  • Anxiety has three main components: emotional, physiological, and cognitive.
  • Imagine you have a presentation coming up at work. You might notice feelings of fear and dread, two examples of the emotional component. You may also notice bodily sensations, such as heart palpitations, sweating, or a tightness in your stomach, which represent the physiological component. Finally, worries and negative thoughts about what might happen in the future are the cognitive component. While worry is an important part of anxiety, it is only one of the three main building blocks.
  • Anxiety in itself is not bad. Normal levels of anxiety lie on one end of a spectrum and may present as low levels of fear or apprehension, mild sensations of muscle tightness and sweating, or doubts about your ability to complete a task. 
  • Symptoms of normal anxiety do not negatively interfere with daily functioning. They may actually improve your attention and problem-solving, motivate you to work harder toward a goal, or warn you about a potential threat. For example, anxiety about an upcoming exam will likely drive you to prepare fully. Normal levels of anxiety can be adaptive and helpful to your everyday life.
  • Clinical levels of anxiety fall toward the other end of the spectrum. Diagnosable anxiety disorders occur when anxiety levels rise enough to rapidly decrease performance and cause impairment.
  • Anxiety disorders are characterized by severe, persistent worry that is excessive for the situation, and extreme avoidance of anxiety-provoking situations. These symptoms cause distress, impair daily functioning, and occur for a significant period. If you believe you may have an anxiety disorder, seek help as soon as possible.
  • When the level of anxiety you experience is no longer adaptive or helpful to your performance and becomes a barrier to your enjoyment of life, but does not yet meet the diagnostic threshold for an anxiety disorder, you are “almost anxious.” Someone who is “almost anxious” may sit at their desk all day, making minimal progress on an assignment due to constant worries and tightness in the stomach. While anxiety did not make it impossible to come to work, the level of anxiety experienced is making it hard to function. 
Identify situations that make you anxious, and approach them instead of avoiding them. For example, if you are afraid of public speaking, talk in front of others as often as possible. Over time, you will find the discomfort fades away as you face the very things that used to cause you anxiety!

Saturday, 11 May 2019

Modi - India's divider in chief - TIME

Of the great democracies to fall to populism, India was the first. Advent of Modi is at once an inevitability and a calamity for India. The country offers a unique glimpse into both the validity and the fantasy of populism.
  • This secularism was more than merely a separation between religion and state; in India, it means the equal treatment of all religions by the state, although to many of its critics some being more equal than others. 
  • Indian Muslims were allowed to keep Shari’a-based family law, while Hindus were subject to the law of the land.
  • Narendra Modi, the son of a tea seller, and his election was nothing short of a class revolt at the ballot box. It was no longer about left, or right, but something more fundamental.
  • The nation’s most basic norms, such as the character of the Indian state, its founding fathers, the place of minorities and its institutions, from universities to corporate houses to the media, were shown to be severely distrusted. 
  • The cherished achievements of independent India–secularism, liberalism, a free press–came to be seen in the eyes of many as part of a grand conspiracy in which a deracinated Hindu elite, in cahoots with minorities from the monotheistic faiths, such as Christianity and Islam, maintained its dominion over India’s Hindu majority.
  • Modi attacked once unassailable founding fathers, such as Nehru, then sacred state ideologies, such as Nehruvian secularism and socialism; he spoke of a “Congress-free” India; he demonstrated no desire to foster brotherly feeling between Hindus and Muslims. Most of all, his ascension showed that beneath the surface of what the elite had believed was a liberal syncretic culture, India was indeed a cauldron of religious nationalism, anti-Muslim sentiment and deep-seated caste bigotry. 
  • The country had a long history of politically instigated sectarian riots, most notably the killing of at least 2,733 Sikhs in the streets of Delhi after the 1984 assassination of Indira Gandhi by her Sikh bodyguards. The Congress leadership, though hardly blameless, was able to separate itself from the actions of the mob. Modi, by his deafening silences after more recent atrocities, such as the killing of more than 1,000 people, mostly Muslims, in his home state of Gujarat in 2002, proved himself a friend of the mob. 
  • Modi, without offering an alternative moral compass, rubbished the standards India had, and made all moral judgment seem subject to conditions of class and culture warfare. 
  • When, in 2019, Modi tweets, “You know what is my crime for them? That a person born to a poor family is challenging their Sultunate [sic],” he is trying to resurrect the spirit of 2014, which was the spirit of revolution. 
  • In 2014, Modi converted cultural anger into economic promise. He spoke of jobs and development. Taking a swipe at the socialist state, he famously said, “Government has no business being in business.”
  • Not only has Modi’s economic miracle failed to materialize, he has also helped create an atmosphere of poisonous religious nationalism in India. One of his young party men put it baldly, “If you are with Modi, you are with India. If you are not with Modi, then you are strengthening anti-India forces.” 
  • India’s Muslims, 14% of the population, have been subjected to episode after violent episode, in which Hindu mobs, often with the state’s tacit support, have carried out a series of public lynchings in the name of the holy cow. Hardly a month goes by without the nation watching yet another enraged Hindu mob falls upon a defenseless Muslim. The most enduring image of Modi’s tenure is the sight of Mohammad Naeem in a blood-soaked undershirt in 2017, begging the mob for his life before he is beaten to death. The response of leadership in every instance is the same: virtual silence. Basic norms and civility have been so completely vitiated that Modi can no longer control the direction of the violence. Once hatred has been sanctioned, it is not always easy to isolate its target, and what the BJP has discovered to its dismay is that the same people who are willing to attack Muslims are only too willing to attack lower-caste Hindus as well. 
  • Under Modi minorities of every stripe–from liberals and lower castes to Muslims and Christians–have come under assault. Far from his promise of development for all, he has achieved a state in which Indians are increasingly obsessed with their differences. If in 2014 he was able to exploit difference in order to create a climate of hope, in 2019 he is asking people to stave off their desperation by living for their differences alone.
The incumbent Modi may win again–the opposition, led by Rahul Gandhi, an unteachable mediocrity and a descendant of Nehru, is in disarray–but Modi will never again represent the myriad dreams and aspirations of 2014. Then he was a messiah, ushering in a future too bright to behold, one part Hindu renaissance, one part South Korea’s economic program. Now he is merely a politician who has failed to deliver, seeking re-election. Whatever else might be said about the election, hope is off the menu. Modi is merely a politician who has failed to deliver, seeking re-election and what he might do to punish the world for his own failures, if he gets a second term? 

Going gluten-free

Gluten-free foods now show up everywhere. Supermarket aisles abound with products proudly labeled “Gluten free,” and many restaurants now offer gluten-free options. There is a puzzling and worrisome new phenomenon: parents who are putting their children on gluten-free diets. It’s puzzling because in the vast majority of cases it isn’t necessary and it’s worrisome because, although parents are doing it because they think it’s healthy, a gluten-free diet can be very unhealthy for children.  Based on little or no evidence other than testimonials in the media, people have been switching to gluten-free diets to lose weight, boost energy, treat autism, or generally feel healthier. This doesn’t make much sense.
  • Gluten is a protein found in wheat, rye, barley, and some other grains. It’s in bread and other baked goods, cereals, pastas and in many other foods in small amounts. 
  • For people with celiac disease, even those small amounts can make them sick. People with allergies to wheat can’t eat it either. But the number of people with celiac disease or wheat allergy is actually pretty small.
  • People who are sensitive to gluten may feel better, but a larger portion will derive no significant benefit from the practice. They’ll simply waste their money, because these products are expensive.
  • Avoiding gluten means more than giving up traditional breads, cereals, pasta, pizza, and beer. Gluten also lurks in many other products, including frozen vegetables in sauces, soy sauce, vitamin and mineral supplements, some medications, and even toothpaste. 
  • If you’re determined to go gluten free, it’s important to know that it can set you up for some nutritional deficiencies. Fortified breads and cereals have become a major source of B vitamins. Taking a gluten-free multivitamin-multimineral supplement is a good idea for anyone trying to avoid gluten.
  • Whole wheat is also a major source of dietary fiber, which the bowels need to work properly. The average American diet is deficient in fiber. Take away whole wheat and the problem gets worse. It’s possible to get the fiber you need from other grains but you’ll need to make the effort.
  • Because gluten is in so many foods, being on a gluten-free diet can also make school lunches, play dates, and other aspects of a child’s daily life more complicated and expensive.
  • If you think you might have celiac disease or gluten sensitivity, it’s best to see a doctor before you go gluten free. Once a person has avoided gluten for a while, it becomes difficult to establish if he or she has celiac disease, gluten sensitivity, or neither.
Keep your dietary choice to yourself. The more than 300,000-plus people in USA with celiac disease have to follow a gluten-free diet, because the taste of gluten triggers gastrointestinal discomfort. Going gluten-free is time consuming, expensive, and restrictive. It’s a gigantic burden for those who have to follow it. Before you cut gluten out of your child’s diet, talk to your doctor. Talk together to achieve what you are hoping to achieve by cutting out gluten. A child’s diet can have a big effect on not only her current health, but her future health; be sure you are making the very best choices.

Friday, 10 May 2019

Parents can help children to succeed in life

In the wake of the recent college admissions scandal, in which rich parents paid thousands or even millions of dollars to bribe coaches or have someone else take standardized tests for their children so that they could get into elite colleges, there has been a lot of discussion about admission to elite colleges and about what it takes to succeed. Going to an elite college can help, mostly in terms of networking and resume-building, but it is not the ticket to success.True success and happiness in life comes from being able to create, persevere, roll with life’s punches, and work with others. Parents and caregivers can teach children these skills from infancy onwards. 

Here are five ways parents can set up their children for success.
  1. Reinforce executive function skills
    Executive function skills are our ability to pay attention, plan, troubleshoot, multitask, control our emotions, negotiate, and delay gratification. These are skills that children learn as they grow and can be taught and reinforced. There are activities and games that parents can do with their children that help build these skills, many of which involve using their imagination and interacting with others — which works best when devices are turned off, and when time is not filled up with scheduled activities.
  2. Let children be independent — and let them fail
    Many parents limit their children’s independence for good reason of safety. But children cannot grow into independent adults if they never get to explore the world around them and make choices for themselves, which inevitably means that they will make at least the occasional bad choice. Learning from mistakes is some of the best learning we do. Control temptation to jump in and save them, but limit that to the real emergencies. They will do better, if parents are supportive and help them think it through. They will also learn to survive the mistakes.
  3. Foster resilience
    Resilience is the ability to manage adversity, to deal with setbacks and failure and get back up again. Letting children be independent and fail helps build this. Having the consistent support of loving adults is key.
  4. Build social skills and empathy
    Children need to learn how to make and keep friends, how to listen to others and care about their thoughts and feelings. From teaching “please” and “thank you” and taking turns, to getting them involved in activities involving social interactions, to getting involved in community and volunteer activities, there are many ways that parents can build these skills.
  5. Encourage curiosity and creativity
    Go places like parks or museums or historical sites. Explore together. Go to the library and get books. Have lots of paper and paint around. Make things together. Watch documentaries; read the news and talk about it. Make up stories. Build things. Help your child see the world as full of fascination and possibility. Help them understand how much ability they have to create.
These are the skills that make a difference, not where someone goes to college. These are the skills that help people find their way, succeed at what they do — and have fun doing it.

Wednesday, 8 May 2019

Why limit the government?

Why limit government? Why not?! 
  • We do a better job describing Hell than Heaven. 
  • We want to limit government, because we are opposed to excessive government. 
  • We want to limit government because we support freedom and the free society.
  • We want to limit government because we want to maximize opportunity, enterprise and creativity.
  • We want to limit government because we want to permit individuals to go as far as their talents, ambitions, and industry can take them.
  • We want to limit government because we want people to dream and to have the room to bring those dreams to fruition -- for themselves and their families.
  • We want to limit government because we want to strengthen the institutions of civil society that tend to shrink as government grows. Institutions such as the family, church, synagogue, mosque, community, and the many voluntary associations are the bedrock of liberty and self-reliance.
  • We want to limit government because it ought to be confined to certain minimal, but critical, functions and otherwise leave us alone.
  • Government has nothing to give anybody except what it first takes from somebody, and a government that is big enough to give you everything you want is big enough to take away everything you've got.
  • The political process is no way to run a business or almost anything else. The deficiencies, absurdities, and perverse incentives inherent in the political process are powerful enough to frustrate anyone with the best and most altruistic of intentions. It frequently exalts ignorance and panders to it. 
  • A few notable exceptions aside, the political process tends to attract the most mediocre talent with motives that are questionable at best. Government runs on the political process and all of the problems endemic to politics show up in what government does and doesn't do.
  • Politics is a serious business because it's the part where coercion puts flesh on the rhetorical bones.
  • What makes a politician a politician and differentiates politics from all other walks of life is that the politician's words are backed up by his ability to deploy legal force on their behalf.
  • Mutual consent encourages actual results and accountability, the political process puts a higher premium on the mere promise or claim of results and the shifting of blame to other parties.
  • In the marketplace, you always pay for what you get. In politics, the connection between what you pay for and what you actually get is problematic at best.
Limiting government is a lofty endeavor. It's good, honest work. It's a powerful message when presented well.

Politics may not be the oldest profession, but the results are often the same.

Government is not reason. It is not eloquence. It is force. 
Like fire, it can be a dangerous servant or a fearful master - America's Founders

Friday, 3 May 2019

Living wage

In 2001 a dormant idea with deep historical roots was revived in London’s East End: the living wage. A living wage is the minimum income necessary for a worker to meet their basic needs. Needs include food, housing, clothing etc. Family circumstances vary and no realistic hourly pay rate can ever lift every family to an adequate living standard. The goal of a living wage is to allow a worker to afford a basic but decent standard of living. Due to the flexible nature, the term "needs" varies by location and household type.
  • A living wage generally means that a person working 40 hours a week, with no additional income, should be able to afford the basics for a modest but decent life, such as, food, shelter, utilities, transport, health care, and child care. Whereas minimum wage focuses on what the labor market can bear without a significant effect on employment.
  • Living wage advocates have further defined a living wage as the wage equivalent to the poverty line for a family of four. The income would have to allow the family to 'secure food, shelter, clothing, health care, transportation and other necessities of living in modern society'.
  • The living wage differs from the minimum wage in that the latter is set by national law and can fail to meet the requirements to have a basic quality of life which leaves the family to rely on government programs for additional income.
  • Employee, employer, and community all benefited with a living wage. Employees would be more willing to work, helping the employer reduce worker turnover, and it would help the community when the citizens have enough to have a decent life. 
  • A living wage, by increasing the purchasing power of low income workers, focuses on stimulating demand in order to improve the state of the economy.
  • Low wages and excessive working hours in global supply chains often leave full-time workers and their families to live in poverty. Adoption of a living wage meets workers’ basic needs to maintain a safe, decent standard of living. 
  • The real living wage is based on the cost of living and is voluntarily paid by employers who believe a hard day's work deserves a fair day's pay. 
  • In UK, far too many people earn far too little to get by. UK has a high share of low-paid workers, with one in five employees in low-paid work. The rate of low pay has risen gradually for the past 30 years. It is most prevalent among women, part-time and younger workers. In some sectors it is endemic; in hospitality, 69% of workers are low paid, in retail 41%. Recent years have also seen gradually rising rates of in-work poverty. While the minimum wage safeguards around one million of these workers from extreme low pay, on its own it is not a solution to the wider problem of endemic low-paid work. 
  • Some 23% of jobs outside London paid less than the living wage in 2014, compared with 19% in London.  Local and regional initiatives continue to proliferate, building on a string of successes that have secured improvements in pay for nearly 45,000 low-paid workers. Living wage initiatives have reshaped social norms around wages and in-work poverty and have refocused attention on the role that decent pay above the national minimum can play in raising living standards, alongside remedial redistribution through tax credits and in-work benefits. 
  • The Walton family which owns Wal-Mart is the wealthiest family in America and it is absurd that thousands of their low-wage workers are forced to use programs like food stamps, Medicaid and subsidized housing. Wal-Mart should not be paying starvation wages. Struggling working families should not have to subsidize the wealthiest family in the country. 
The real poverty in our society lies with those who are not in work at all, and the implementation of the living wage will do nothing to improve their chances of a job. The solutions for the unemployed are different from those for low-paid jobs and a single measure cannot help both groups and risks harming one at the expense of the other. It is insanity that companies pay small wages and high taxes and the government uses those taxes to supplement to the low wages. It would be better for companies to pay higher wages and for the benefits system to be much smaller, requiring smaller taxes? What is impossible is to pay low wages, low taxes and no benefits.

No business which depends for existence on paying less than 
living wages to its workers has any right to continue in this country.
By living wages I mean the wages of decent living - Franklin D. Roosevelt

There are 400 American billionaires because there are 45 million people living 
in poverty. Profit comes at the expense of the living wage. Corporate executives, 
university presidents, and capitalists in general are living the good life -- because 
so many others are living a life of hardship - Keeanga-Yamahtta Taylor

Thursday, 2 May 2019

Wealth isn’t created at the top. It is merely devoured there

Bankers, pharmaceutical giants, Google, Facebook ... a new breed of rentiers are at the very top of the pyramid and they’re sucking the rest of us dry.
  • The truth is that we are living in an inverse welfare state.
  • These days, politicians assume that most wealth is created at the top. By the visionaries, by the job creators, and by the people who have “made it”. By the go-getters oozing talent and entrepreneurialism that are helping to advance the whole world.
  • We may disagree about the extent to which success deserves to be rewarded – the philosophy of the left is that the strongest shoulders should bear the heaviest burden, while the right fears high taxes will blunt enterprise – but across the spectrum virtually all agree that wealth is created primarily at the top.
  • When economists talk about “productivity”, what they really mean is the size of your paycheck. And when we use terms like “welfare state”, “redistribution” and “solidarity”, we’re implicitly subscribing to the view that there are two strata: the makers and the takers.
  • In reality, it is the waste collectors, the nurses, and the cleaners whose shoulders are supporting the apex of the pyramid. A growing share of those we hail as “successful” and “innovative” are earning their wealth at the expense of others. The people getting the biggest handouts are not down around the bottom, but at the very top.
  • There are two ways of making money. The first is what most of us do: work. Tapping into our knowledge and know-how to create something new, a wedding cake, a stylish updo, or a perfectly poured pint. To work is to create new wealth.
  • There is also a second way to make money. That’s the rentier way: by leveraging control over something that already exists, such as land, knowledge, or money, to increase your wealth. You produce nothing, yet profit nonetheless. By definition, the rentier makes his living at others’ expense, using his power to claim economic benefit.
  • There is no longer a sharp dividing line between working and rentiering. The modern-day rentier often works damn hard. Countless people in the financial sector apply great ingenuity and effort to amass “rent” on their wealth. It’s hardly surprising that they feel wholly entitled to their wealth.
  • Our economy as a system shows solidarity with the rich rather than the poor. The clearest illustration of modern freeloaders at the top: bankers. Studies conducted by the International Monetary Fund and the Bank for International Settlements have revealed that much of the financial sector has become downright parasitic. Instead of creating wealth, they gobble it up.
  • Banks help us gauge risks and get money where it is needed which are vital to a well-functioning economy. Economists tell us that the optimum level of total private-sector debt is 100% of GDP. If the financial sector only grows, it won’t equal more wealth, but less. In the UK, private-sector debt is now (2017) at 157.5%. In the USA, the figure is 188.8%.
  • The financial innovation concocted by all the math whizzes working in modern banking (instead of at universities or companies that contribute to real prosperity) basically boils down to maximizing the total amount of debt. And debt is a means of earning rent. So for those who believe that pay ought to be proportionate to the value of work, the conclusion we have to draw is that many bankers should be earning a negative salary; a fine, for destroying more wealth than they create.
  • Bankers are the most obvious class of freeloaders.A lawyer and an accountant wields a similar revenue model. Take tax evasion. Untold hardworking, academically degreed professionals make a good living at the expense of the populations of other countries. Take the tide of privatizations which have been all but a carte blanche for rentiers. One of the richest people in the world, Carlos Slim, earned his millions by obtaining a monopoly of the Mexican telecom market and then hiking prices sky high. The same goes for the Russian oligarchs who rose after the Berlin Wall fell, who bought up valuable state-owned assets for song to live off the rent.
  • Most rentiers are disguised and not easily identified. They look like industrious folks, because for part of the time they really are doing something worthwhile. Precisely that makes us overlook their massive rent-seeking.
  • Pharmaceutical companies like GlaxoSmithKline and Pfizer regularly unveil new drugs, yet most real medical breakthroughs are made quietly at government-subsidized labs. Private companies mostly manufacture medications that resemble what we’ve already got. They get it patented and, with a hefty dose of marketing, a legion of lawyers, and a strong lobby, can live off the profits for years. In other words, the vast revenues of the pharmaceutical industry are the result of a tiny pinch of innovation and fistfuls of rent.
  • Even paragons of modern progress like Apple, Amazon, Google, Facebook, Uber and Airbnb are woven from the fabric of rentierism. Because they owe their existence to government discoveries and inventions (every sliver of fundamental technology in the iPhone, from the internet to batteries and from touchscreens to voice recognition, was invented by researchers on the government payroll). And they tie themselves into knots to avoid paying taxes, retaining countless bankers, lawyers, and lobbyists for this very purpose. Companies like this are incredibly difficult to compete with, because as they grow bigger, they only get stronger.
  • Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate. These companies own a platform that lots and lots of people want to use. First, because they’re cool and they’re fun – and in that respect, they do offer something of value. The main reason why we’re all happy to hand over free content to Facebook is because all of our friends are on Facebook too, because their friends are on Facebook … because their friends are on Facebook. Stripped down to essentials, it’s an ordinary ad agency. In 2015 Google and Facebook pocketed an astounding 64% of all online ad revenue in the US. The bigger such platforms grow the more powerful they become, enabling the lords of these digital feudalities to demand more and more rent.
  • Rentier is defined as someone who uses their control over something that already exists in order to increase their own wealth. The feudal lord of medieval times did that by building a tollgate along a road and making everybody who passed by pay. Today’s tech giants are doing basically the same thing, but transposed to the digital highway. Using technology funded by taxpayers, they build tollgates between you and other people’s free content and all the while pay almost no tax on their earnings.
  • Why does most of the population work itself to the bone to support these rentiers? Firstly, the modern rentier knows to keep a low profile. There was a time when everybody knew who was freeloading. The king, the church, and the aristocrats controlled almost all the land and made peasants pay dearly to farm it. But in the modern economy, making rentierism work is more complicated. How many people can explain a credit default swap, or a collateralised debt obligation? Or the revenue model behind those cute Google Doodles?  
  • “The world’s most powerful investment bank,” wrote the journalist Matt Taibbi about Goldman Sachs, “is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.” When current Goldman Sachs CEO Lloyd Blankfein was asked about the purpose of his job, his straight-faced answer was that he is “doing God’s work”. 
  • The average rich freeloader manages to masquerade quite successfully as a decent hard worker. He goes to great lengths to present himself as a “job creator” and an “investor” who “earns” his income by virtue of his high “productivity”. Most economists, journalists, and politicians from left to right are quite happy to swallow this story. Time and again language is twisted around to cloak funneling and exploitation as creation and generation.
  • The fact of the matter is that feudalism has been democratised. To a lesser or greater extent, we are all depending on handouts. En masse, we have been made complicit in this exploitation by the rentier elite, resulting in a political covenant between the rich rent-seekers and the homeowners and retirees. Most homeowners and retirees are not benefiting from this situation. The banks are bleeding them far beyond the extent to which they themselves profit from their houses and pensions. Still, it’s hard to point fingers at a kleptomaniac when you have sticky fingers too. So why is this happening? The answer can be summed up as: Because it can.
  • Rentierism is, in essence, a question of power. It’s no different for the modern rentier. He’s got the law, politicians and journalists squarely in his court. That’s why bankers get fined peanuts for preposterous fraud. The biggest tragedy is that the rentier economy is gobbling up society’s best and brightest. Ivy League graduates are opting for banks, law firms, or trumped up ad agencies like Google and Facebook. When you think about it, it’s insane. 
  • In a rentier economy, innovation remains just concerned with further bolstering that very same economy. This explains why the big dreams like flying cars, curing cancer, etc have yet to be realised, while bankers and ad-makers have at their fingertips technologies a thousand times more powerful.
Yet it doesn’t have to be this way. Tollgates can be torn down, financial products can be banned, tax havens dismantled, lobbies tamed, and patents rejected. Higher taxes on the ultra-rich can make rentierism less attractive, precisely because society’s biggest freeloaders are at the very top of the pyramid. But such a revolution require a different narrative about the origins of our wealth. All we need to do is to give real hard-working people what they deserve. And they are the waste collectors, the nurses, the cleaners – theirs are the shoulders that carry us all.

Like a parasite stunts a child’s growth,
so the rentier drains a country of its vitality.

Wednesday, 1 May 2019

Elite capture

Elite capture is a form of corruption whereby public resources are biased for the benefit of a few individuals of superior social status in detriment to the welfare of the larger population. 
  • Elites are those who enjoy privileged status and exercise decisive control over society. Three-fold classification of elites are (a) knowledge elites, (b) entrepreneurial elites and (c) political elites. 
  • Elites are groups of individuals with self-ratifying factors such as social class, asset ownership, religious affiliations, political power, etc have decision-making power in processes of public concern and uses public funds intended to be invested in services that benefit the larger population, to fund projects that would only benefit them. 
  • Elite capture is related to information asymmetry, inefficient regulation or inefficient allocation of resources causing biased distribution of a public goods or a services, wherein certain segments of the population experience reduced access to these public goods. As long as there is elite capture, the welfare impact will not be Pareto Optimal* or equitable.*Pareto optimality is simply a statement of impossibility of improving one variable without harming other variables.
  • When people have preferences about what other people do, the goal of Pareto efficiency can come into conflict with the goal of individual liberty.
  • By yielding power to smaller units, money should be more efficiently distributed, but local governments are more vulnerable to pressure groups. Local governments are even more vulnerable to capture by local elites than national governments.
  • Community-based development has inadequate understanding of power relationships at the local level, which leaves room for elite capture.
  • An elite derives its status from its relationship to property, whether physical or human capital. While stable property rights are necessary for everyday business, unstable property rights may have a positive impact on economic development. Institutional changes have a positive impact on economic development when a country’s elite can manage them. 
  • Counter-elite approach need not necessarily be effective in challenging elite domination, but the co-opt-elite approach risks legitimizing the authority of the elites and worsening poverty by implementing anti-poor policies. The success of dealing with elite capture lies in the flexible use of the counter-elite and co-opt-elite approaches together with the need to secure alternative livelihoods and to achieve empowerment with the poor.
  • The role of elites in economic development have a disproportionate impact on development outcomes. While a country's endowments constitute the deep determinates of growth, the trajectory they follow is shaped by the actions of elites.
  • Poverty is a problem for the rich in the sense that it generates negative externalities that they would like to reduce, and that the elite believe that there are effective remedies. While reducing poverty is a national priority, elites do not see it as their responsibility to do something about it. Elites feel that through education, poor will be able to take advantage of opportunities and resources and is a solution because everyone can supposedly get richer without the need for redistribution. Elites are failing to create a consciousness that makes them react more responsibly in supporting pro-poor policies.
  • Evolution of welfare states inform us that elites’ prioritization of poverty reduction is driven by the extent to which elites and the poor are interdependent, such that the presence of the poor has a positive or negative impact on elite welfare. 

Believers in liberal freedom should worry whether they can prevail
against their own forms 
of institutional entropy:
elite capture, corruption, and inequality - Michael Ignatieff