Messy America or a messy world

We Indians are used to getting depressed after picking up the morning newspaper. News of non-functional government, road rage, political gimmicks, and injustice is generally all over. And many of us, and of course many in this world look to America as an ideal place to be in. Not for nothing is the phrase ‘the American Dream’ so popular.

However, when I read the NYT today it made me feel bad. The denial of clemency to Troy Davis and the mention of police forcing witnesses to testify incorrectly, bad news on Afghanistan front and a reminder that this would be a never healing wound, the governor of California Jerry Brown finding it difficult to deal with Republicans and the images of the debt default crisis and so on and so forth. This is news but this is symbolic of the fundamental fractures that have appeared in the American system and it is tough to believe if these could be cured especially when the inspiring Obama is appearing hapless.

 It is true that sometimes we feel good that as we are growing economically and therefore politically in the global arena the so called bosses of this world are seeing a decline. Only recently was I emailing the YouTube videos of American ‘tent cities’ to my colleagues in my office. However, at another level America for all its bossism is also a set of superb values. Well many Indians feel that we have stronger values than say Americans but my reading is values in India are more of hypocrisy.

Europe again is in crisis which is not just economy related but reflective of deeper malaise in the system. So that makes me wonder if we are all in a period of institutional decline or is this a transitional phase of say a couple of decades when the high would converge to the low and then the low would reach to a higher pedestal. In other words would Indian or Chinese values and institutions graduate and mature enough to ever reach the status of an ‘American Dream’ in its true sense.

Or has something changed drastically in the set of human values that would never allow us to recreate such a nation. As Fareed Zakaria mentions we are a bit more pessimistic today because of the flood of easy information, and I am cognisant of that. There are no world wars, no cold war of the previous magnitude, increasing longevity and so on, and terrorism kills lesser number of people than events in say earlier times. There is also a flood of philanthropy lead by the likes of Gates and Buffetts.

What do you think then? Is it a messy America or a messy World?

Quick, advanced, quarterly.............. how does one comprehend so many estimates?

I am an economist but I have been struggling with the number of estimates that are generated these days. Say we talk about a developed economy which unlike the Indian economy publishes very granular economic data. There would be thousands of variables related to GDP, Inflation, Industry, Credit etc. that are published. While this is certainly a good and useful thing to do what troubles me most is the series of estimates that get generated.

In terms of regularity of reports you have weekly, monthly, quarterly, half-yearly and annual reports. Then in terms of the preciseness of reporting you have the quick estimates, then you have the advance estimates, and then you have a set of revised estimates. Top all this by the number of agencies that report these estimates – the central bank, the treasury, the statistical agency, the chambers of commerce, the commercial and investment banks, the budgetary bodies, the independent/ autonomous bodies that evaluate economic and public finance figures, the supranational bodies like the IMF, OECD, and World Bank and last but not the least the think-tanks. How many estimates does this all make? And this does not include forecasts. It also does not include the revisions in series, and revisions in base numbers that happens every few years. It also does not include the estimates of so many other economies in this coupled world that can have an impact on the economy under discussion.

The problem is by the time one analyses one set of estimates, a new set of estimates arises. Each economist can cite his set of estimates and prove another economist incorrect and defend his/her own turf. Well I have heard of the rationale for publishing the estimates at as short an interval as possible – you are warned of any lurking dangers at the right time. However, I think this is taking it a bit too far. We are facing a surfeit.

Rational behaviour - some evidence

US Auto employees agree to work at below par wages 
"In the auto industry, for example, the major companies are in the process of increasing the number of employees at their plants who work for $14 an hour, as opposed to the average $28 an hour previously earned by workers at these enterprises. They are doing so with the active support of the trade unions." (view story)

Two-tier wage system in US auto industry
"Nothing distinguishes them from other workers at the Jefferson North plant, except their paychecks. The newest workers earn about $14 an hour; longtime employees earn double that.
With the economy slumping and job creation once again a pressing issue in the White House and Congress, the advent of a two-tier wage system in Detroit is spiking employment for one of the country’s most important manufacturing industries." (View Story)



India reacts less to inflation as income rises
"More broadly, though, I sense that for all the sound and fury, the political tolerance for a period of high inflation has risen. I suspect this is to do with the fact that earlier episodes of high inflation in India occurred in an economy where income per head rose very sluggishly indeed. Now, with real rates of economic growth near 9%, and slower population growth than before, real incomes are rising fast enough that people are willing to put up with high inflation for some time." (The Economist)

When California reminded me of Bihar

Thefts are quite common in India and one of its states Bihar is particularly notorious for it. And we are not talking of thefts in houses alone but the theft of public property. During my recent visit to my home town in Bihar I found that the grills used around the public playground have started to disappear. People are cutting these iron pieces to sell them in the market as prices of iron soar. Iron bars of that quality sell for about Rs. 60-70 per kg. at todays' prices.

A popular social enterprise called Husk Power Systems (HPS) is facing similar problems in the West champaran area of Bihar. Its transmission wires frequently get stolen. A youtube video captures this well.

However, I was happy (in a sadistic way) to see a recent article in NY Times that covered thefts in the state of California. Almost everything in the open is getting stolen be it tomatoes, copper wires, bee-hives, or batteries. Here is an excerpt from the article "Farm thieves target grapes, and even bees"


"While other states have their own agricultural intrigue — cattle rustlers in Texas, tomato takers in Florida — few areas can claim a wider variety of farm felons than California, where ambushes on everything from almonds to beehives have been reported in recent years. Then there is the hardware: diesel fuel, tools and truck batteries regularly disappear in the Central Valley, the state’s agricultural powerhouse, where high unemployment, foreclosures and methamphetamine abuse have made criminals more desperate, officials say."

Manmohan not the lone puppet - Julia Gillard, Cameron offer company

It seems everybody running a democratic government becomes a puppet to someone or the other. In India the Prime Minister Manmohan Singh has been called lameduck. He has been referred to as a puppet in the hands of the Congress President Sonia Gandhi.

I used to find these remarks disturbing since his behaviour was more an outcome of the compulsions of coalition politics. To my pleasant surprise, however, prime ministers being labelled puppets is a very commonly deployed tactic by the opposition/public. Or so it appears in the coalition led governments in three democratic governments - India, Australia, and the United Kingdom (UK.)

In fact i sighed relief at the Indian belittling standards when i saw the picture below (Herald Sun). The opposition leader in Australia (Mr. Abbott) talking to public with placards behind calling the prime minister a bitch and a witch. I am sure Mr. Advani or Sushma Swaraj would never stoop to such low standards.

David Cameron met the same fate (being labelled a puppet) recently after the News of The World (NOTW)/Murdoch scandal on account of his close ties with the Murdochs. (picture from Guardian)

Cosmetologist license or pilot license, all bear brunt of government paralysis across the globe

My friend Ankit Tewari in India has finally managed to fulfill all the requirements for becoming a chopper pilot. He has spent a lot of money, and invested a number of years in trying to become eligible for this elite job. Unfortunately the Directorate General of Civil Aviation (DGCA) which is the aviation authority in India is currently facing a lot of flak for doling out licenses to candidates that were not suited for the job. As a consequence it has temporarily halted the process of granting pilot licenses while it scrutinises and revamps the process. My friend therefore is stuck for no fault of his. He needs to start earning soon to pay his debts but he has no choice but to wait for the current paralysis in DGCA to be over.

Interestingly, this kind of paralysis affects individuals and economies all across the globe. The Associated Press (AP) recently reported the case of Lyda Hanson of Minnesota who couldn't get her dream job at a recognised hair salon because of the government shutdown in the state. Apparently in Minnesota (and i guess the US in general) one needs a cosmetologist's license to be able to do the job. Lyda had been promised the job even before she graduated but because she couldn't get the license the job went to someone else.

India runs a huge deficit for trained pilots and the US in its current state is in dire need of people getting employed. Political, and legacy issues, however, make the situations worse at such times.

Some India Statistics

Finding the correct data, in the correct form is still a challenge in India. I am sure with renewed efforts by RBI in collecting new kinds of data and presenting the existing data in more suitable ways the situation would change five years down the line but until then we would have to slog. The Ministry of Statistics and Programme Implementation (MOSPI) has tried to integrate data from CSO, NSSO, ISI and other statistical institutions in India but so far the outcome is far from satisfactory. In this blog i would try to put together all such data that i would have had trouble collecting.

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