Global recession and sue

On the debate of present recession it may be untold fact that the “Greenspan and Reddy are credited with far more power than they ever had, and with responsibility for outcomes largely beyond their control. Central bankers actually have very limited tools, and hence very limited powers.” 

Further Mr Aiyar argues “Central banks can squeeze the whole economy through monetary measures. But can they selectively squeeze only asset bubbles and not desirable activity? No, says Greenspan. I know of no historians who have proved otherwise.” 

But it reminds me another article published recently in the Indian Express by Bibek Debroy titled Can you sue God? 

Let me ask, Can RBI sue bubbles?

Of course, the RBI or any central bank is not god. But for god unlike RBI or central bank there is no respondent. 

Private Consolidate Fund of India

It is not new when companies donate money to parties. But transformation of this idea is still not yet under way. 

There could be a Private Consolidate Fund of India (PCFI) which can fund political parties (candidates) that link practical policies that have alternative option to poster the society. 

In fact in the present funding system many people really do not know how much they spend on one non criminal candidate and a criminal candidate. 

This PCFI could be an independent bank of charity to manage funds. It should never accept money from any form of Government. 

According to Bibek many industrialist donated money to political parties. He writes in the Indian Express that: 

• “The UTVI channel has used the RTI Act to collect data on income tax returns filed by political parties. The figures are sometimes for 2007-08, sometimes for 2008-09. So we know, the largest donors have been Aditya Birla group, Torrent Power, Videocon, Salgaonkar, Dempo, Chowgule, Charitable Trust, Jubilant Enpro, Kamaljit Singh Ahluwalia, Timblo, Prime Builders and Developers, Honda Siel, Trans Indian Freight Services and United Phosphorus. 
  
• I am told some corporate boards insist donations should be evenly spread out, not necessarily equally, but perhaps in some proportion to seats in Parliament. But that’s not what this list shows. Aditya Birla prefers Congress, Kamaljit Singh Ahluwalia prefers BJP and Honda Siel prefers Samajwadi Party.”
  

Economics, town and untrained economists………

In the morning I read three articles the subject of article vary from financial crisis to urbanization and false theory of economists. 

First, in today’s ET Joseph E. Stiglitz has article in which he says that “Trickle-down economics almost never works” it comes after doing a significant damage which the present academic community fails to understand and give up the theory. 

Second, fight over whether macroeconomics was advanced or not after 1970s. Typically T. C. A. Srinivasa-Raghavan says by quoting Keynes who said in 1931 that “If economists could manage to get themselves thought of as humble, competent people on a level with dentists that would be splendid.” 

And “he is also intensely critical of the tendency introduced by engineers-turned-economists to look on the real world as a sort of machine where pressing the right buttons leads to predicable outcomes.”

 In case of India it includes Raghuram Rajan also. 

T. C. A. Srinivasa-Raghavan earlier criticized Raghuram Rajan report on financial sector reform saying “unfortunately, and thanks in a large measure to the data boys, especially those with engineering backgrounds, this has become a generalised problem in macroeconomic analysis and policy wonking. So even though they pour scorn on anecdotal evidence, the data boys have become guilty of the same methodological flaw. They confuse correlation with causality and use induction and deduction inter-changeably.” 

Third, in India many think Bibek Debroy is a liberal economist but some time seem to be a terribly Keynesian economist. He writes in today’s Financial Express “In the long run we are all dead.” Most people know this Keynes quote and most non-economists probably think it is from General Theory (1936). It is actually from A Tract on Monetary Reform (1923), written well before those troubled times. Given these troubled times, the subsequent sentence has relevance for the tribe of economists. “In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again.”