With fiscal stimuli and bailout packages running into many hundred billions of dollars, the following perspective helps (courtesy Business Standard):
1) One billion seconds ago, it was 1959!
2) One billion minutes ago, Jesus Christ was alive!
3) One billion hours ago, humankind did not exist!
If you become a billionaire, and spend Rs. 50 every second of your life, and not earn anything on it at all, you will not run out of money for 50 years.
Amazing!
Friday, February 20, 2009
Wednesday, February 18, 2009
The stimulus panacea
Going by conventional 'wisdom' (an oxymoron if I ever saw one!), there is an easy solution to the world's current ills. 'Stimulus' and 'Bailout'. To me, this looks analogous to an easy cure for alcoholism: whisky and vodka.
Real estate 'developers' in India have been very busy developing their (undeclared) bank accounts at the public's cost. Having dealt with a number of them myself, they seem to me to be cheats to the last guy - exorbitant pricing, late construction, totally unethical behavior are not just rampant, they are even expected by the consumer. They live by the maxim - what's mine is mine and what's yours is also mine. Their demand, therefore, that the government break laws and allow them to build more crappy and super expensive stuff (as a 'stimulus' you see), strikes me as the pinnacle of venality. Or look at the media industry. When the times were good, they were raking in the advertising dollars. Now that the economy is slowing down, they run to the government asking for 'stimulus'. Or infrastructure players (a certain airport developer comes to mind) who have asked for (and got!) higher consumer cesses in a manner which is illegal (according to the original contracts), unethical, and against business principles (oh, people not flying? simple way to get them to fly more - charge them heavily to use the airport!! Duh???)
This is a happy marriage of capitalism and socialism: capitalise all profits and socialise all risks. The fact that there is a huge moral hazard at play seems to escape everyone. Hello? I thought that risk was an essential cost for getting return. Business cycles were an undeniable part of life. But suddenly I find a slew of 'expert economists', abetted in no small measure by the media, sprouting out of the woodwork, expounding on their interpretations of Lord Keynes' theories.
To me, this is nothing but avarice, pure and simple. It is not my case that genuine government intervention is not required in industries which are suffering for factors outside their control. Export oriented industries for example (textile, gems and jewellery, fisheries) are having to lay off thousands and thousands due to events in other geographies. Help in the form of temporary loans, tax relief etc. is very much in order. But please, let us not allow all kinds of fly by night operators to pile on and grab taxpayers' monies in the name of 'stimulus'.
What we need is more accountability, and an ability to take the rough with the smooth. Not 'Bailout'.
Real estate 'developers' in India have been very busy developing their (undeclared) bank accounts at the public's cost. Having dealt with a number of them myself, they seem to me to be cheats to the last guy - exorbitant pricing, late construction, totally unethical behavior are not just rampant, they are even expected by the consumer. They live by the maxim - what's mine is mine and what's yours is also mine. Their demand, therefore, that the government break laws and allow them to build more crappy and super expensive stuff (as a 'stimulus' you see), strikes me as the pinnacle of venality. Or look at the media industry. When the times were good, they were raking in the advertising dollars. Now that the economy is slowing down, they run to the government asking for 'stimulus'. Or infrastructure players (a certain airport developer comes to mind) who have asked for (and got!) higher consumer cesses in a manner which is illegal (according to the original contracts), unethical, and against business principles (oh, people not flying? simple way to get them to fly more - charge them heavily to use the airport!! Duh???)
This is a happy marriage of capitalism and socialism: capitalise all profits and socialise all risks. The fact that there is a huge moral hazard at play seems to escape everyone. Hello? I thought that risk was an essential cost for getting return. Business cycles were an undeniable part of life. But suddenly I find a slew of 'expert economists', abetted in no small measure by the media, sprouting out of the woodwork, expounding on their interpretations of Lord Keynes' theories.
To me, this is nothing but avarice, pure and simple. It is not my case that genuine government intervention is not required in industries which are suffering for factors outside their control. Export oriented industries for example (textile, gems and jewellery, fisheries) are having to lay off thousands and thousands due to events in other geographies. Help in the form of temporary loans, tax relief etc. is very much in order. But please, let us not allow all kinds of fly by night operators to pile on and grab taxpayers' monies in the name of 'stimulus'.
What we need is more accountability, and an ability to take the rough with the smooth. Not 'Bailout'.
Wednesday, February 11, 2009
Joker in the Pack
I finished reading 'Joker in the Pack' today (actually that is a mis-statement). I began and ended within 3 hours.
This is a book jointly written by two very recent IIM alumni, and since a) I got a lot of mixed comments about my earlier post on the shoddy quality of IIM life books and b) since this is a half decent book, I humbly recommend this book.
Please dont expect any fundamental insights about life, or any masterpiece of literature. Instead, this is a brutally unvarnished, picture perfect mirror of daily life at IIM Bangalore. The book is entirely like its protagonist, a 'fighter' who comes out ok in the end. It is so accurate in its descriptions of places, people, processes and (above all) placements, that it brought back bouts of nostalgia :-). Long live IIM Bangalore!! (and its survivors)
This is a book jointly written by two very recent IIM alumni, and since a) I got a lot of mixed comments about my earlier post on the shoddy quality of IIM life books and b) since this is a half decent book, I humbly recommend this book.
Please dont expect any fundamental insights about life, or any masterpiece of literature. Instead, this is a brutally unvarnished, picture perfect mirror of daily life at IIM Bangalore. The book is entirely like its protagonist, a 'fighter' who comes out ok in the end. It is so accurate in its descriptions of places, people, processes and (above all) placements, that it brought back bouts of nostalgia :-). Long live IIM Bangalore!! (and its survivors)
Tuesday, February 10, 2009
Chappal maro campaign
I am scarcely able to keep my temper when I hear of the latest shenanigans of the Sri Ram Sene. Their utterly logic-less, cowardly (and probably impotent) chief has become a talking head and a spouter of 'wisdom'. I do not want to give the a**h*** any publicity whatsoever. Even taking a cynical view of things, I think this guy is the prime example of the virus that will eat this country away. He (and his ilk) needs to be eradicated quickly, clinically and remorselessly.
I would love to personally throw my dirt smeared chappals at this guy, but since I am not in his vicinity, I can do my bit by supporting this campaign. Long live pubgoing, 'loose' and 'forward' women!!
I would love to personally throw my dirt smeared chappals at this guy, but since I am not in his vicinity, I can do my bit by supporting this campaign. Long live pubgoing, 'loose' and 'forward' women!!
Wednesday, February 04, 2009
Beautiful Kashmir III
The last instalment of Gulmarg photos (courtesy Economic Times)
The cable car, general scenery and a sunken truck:
Tuesday, February 03, 2009
Caught in the middle
Statutory warning: the thoughts in this post are a bit muddled.
Today we part fired our car cleaner. The guy was taking life very easy despite earlier warnings, and today the wife asked him to stop cleaning (or pretending to clean) her car. The guy protested a fair bit, and in his ramblings, mentioned that he was cleaning only our cars, that he had a job which gave him holiday on Friday, and that he should be given advance warning.
It so happens that the latest Perry Mason mystery that I've finished reading had a character who became rich by being a prospector in the Klondike. He lived a hard life till he struck it rich by the sweat of his brow. It kind of brought alive the passion of life in the early history of America - a true meritocracy where one made it (or did not make it) depending on their own skill / luck / hard work.
These happenings set off a chain of thought in my head - the car cleaner will now look for something else to make up for his lost income. And then I thought, this is what most people in our country actually do - try to figure out what will make them more money. Whether you take the bottom-of-pyramid guys like the aforementioned car cleaner, or scions of rich businessmen. Of course, it is a bit unfortunate that the former do this to fulfil their basic needs for food and shelter, but the point remains that a very very small percentage of people actually really care about holding down their jobs (which they may or may not like in the least).
Having observed various acquaintances in tier II towns, I find the same trend. No guy from any rich family, or a family that is not historically highly educated, that I have met ever spends time thinking about which job to try and get - they spend their time thinking which business they should be doing - how can they create wealth. In a perverse way, this is true for the very poor also. Only the middle class dude builds his entire life around, and indeed even defines herself, by the job they are holding.
The removal of this mental restriction from the educated middle class minds, in my humble opinion, will set the stage for a truly booming and inclusive economy. It will also possibly lead to more satisfying lives for all of us.
Today we part fired our car cleaner. The guy was taking life very easy despite earlier warnings, and today the wife asked him to stop cleaning (or pretending to clean) her car. The guy protested a fair bit, and in his ramblings, mentioned that he was cleaning only our cars, that he had a job which gave him holiday on Friday, and that he should be given advance warning.
It so happens that the latest Perry Mason mystery that I've finished reading had a character who became rich by being a prospector in the Klondike. He lived a hard life till he struck it rich by the sweat of his brow. It kind of brought alive the passion of life in the early history of America - a true meritocracy where one made it (or did not make it) depending on their own skill / luck / hard work.
These happenings set off a chain of thought in my head - the car cleaner will now look for something else to make up for his lost income. And then I thought, this is what most people in our country actually do - try to figure out what will make them more money. Whether you take the bottom-of-pyramid guys like the aforementioned car cleaner, or scions of rich businessmen. Of course, it is a bit unfortunate that the former do this to fulfil their basic needs for food and shelter, but the point remains that a very very small percentage of people actually really care about holding down their jobs (which they may or may not like in the least).
Having observed various acquaintances in tier II towns, I find the same trend. No guy from any rich family, or a family that is not historically highly educated, that I have met ever spends time thinking about which job to try and get - they spend their time thinking which business they should be doing - how can they create wealth. In a perverse way, this is true for the very poor also. Only the middle class dude builds his entire life around, and indeed even defines herself, by the job they are holding.
The removal of this mental restriction from the educated middle class minds, in my humble opinion, will set the stage for a truly booming and inclusive economy. It will also possibly lead to more satisfying lives for all of us.
Sunday, February 01, 2009
Beautiful Kashmir II
More pictures (from our camera this time).
Alam's dad's home - we really basked in the warm hospitality
Dragon tree next to the house
Multiple layers of clothing - brrrrr
Chai stop
Enroute to Gulmarg
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