Is this the New Deal II?

Niranjan Rajadhyaksha writes in the Mint that the “..banks and other financial institutions are inherently unstable animals that can pull an entire economy down with them—and hence need tight regulation. There is a growing global consensus on this right now”.

Shoe impact

Some time back it was US President who faced shoe impact and asked for 10 size, if at all. Now it is Chinese Prime Minister that is too in the “Cambridge University”.   

Today there is a news in The Business Line “a shoe being hurled at the Chinese Prime Minister, Mr Wen Jiabao, at a place none other than Cambridge University.”

Economists don’t inform everything rightly

If you say this to any one who served as journalist for a long time they will not believe you. It is not surprise to see any false information from The Economic Times. But it turnout now true that the top level economists/journalist writes like joking on the roadside tea shop! 

See in this case: Prem Shankar Jha writes in today’s ET “According to the advance estimates of the Central Statistical Office, GDP growth had slowed down to 7.6% in the first quarter of 2008-09 and further to 7% in the second quarter.” 

And I don’t think it is a print mistake. 

What CSO press release says is the below one: 

According to the CSO, GDP growth had declined to 7.9% and 7.6% in the first and second quarter of 2008-09 compared to 9.2% and 9.3% in the 2007-08 during the same period respectively. 

There are serious pitfalls in the CSO calculation that is altogether different issue.

The Government and the RBI: Two Tale Tango (TTT)

T. C. A. SRINIVASA-RAGHAVAN writes, but rather old jokes of government politics and RBI politics. While the first para may include his part also.

“One only has to look at the financial newspapers (and columns by a few misguided economists with a touching faith in the markets even after they have so visibly and disastrously failed after the Lehman disaster) until mid-January to see how not just the Finance Ministry but also its pet economists had been behaving like those fellows who fire guns in the air during North Indian marriage festivities. It was triumphalism, pure and simple. 

Indeed, in November one very senior government functionary had even said to me, with a chuckle of deep satisfaction, that the RBI now had to take the Government’s permission even to go to the toilet. He had been having a running battle with the RBI — which he had mostly lost — for the last four years. So I suppose his glee was in some senses understandable. 

Only a few days after the current Governor took over in the first week of September, one member of the RBI’s top echelon had made it clear to the then Finance Minister that some of the statements he was making, especially in regard to the health of Indian banks, were uncalled for. He was ignored. The Finance Ministry also set up the liquidity committee — or some such creature — that it wanted to control. The snub to the RBI could not have been more public or more direct. The message to it was that it should either move or get out of the way — shape up or ship out. In the event, the committee met once or twice and then faded away. But the damage had been done. 

Another step was the series of meetings that the Finance Minister called with economists who had never run policy but who had opinions on everything under the sun. 

There were several directors of think tanks in this group and even one or two traders present during the meetings. Everyone was unanimous that the RBI was the problem, not the solution. 

Our political and intellectual leaders can sometimes behave extremely foolishly and this anti-RBI episode is a good example of that”.

Mahatma was a cruel man

Partly Shoba Narayan is right saying “the Mahatma had flaws—he was a cruel husband and a mostly absent, if intensely anxious, father—but his moral compass was as unwavering as it was right. How else could a frail man sway a nation and chase out a powerful empire through ahimsa (non-violence) and satyagraha? Gandhi conducted peculiar experiments with young women—sleeping and bathing nude together to strengthen his chastity—but he didn’t suffer from the moral ambivalence that plagues much of Indian industry today. Ever the champion of human rights, he even put it ahead of nation-building. When Patel, Nehru, Azad and Jinnah were pondering the semantics and logistics of independence, Gandhi was in the largely Muslim areas of East Bengal (now Bangladesh) and Bihar, trying to stop communal violence”. 

Also see my other post here

Have we learned 101 Economics?

William Easterly says “I think we economists love to speculate about heterodox theories when times are good and we feel free to discuss experimental alternatives to economic orthodoxy (and nobody is paying us much attention during good times anyway). But when the global economy is in free fall and everyone else seems ready to throw each and every Econ 101 principle out the window, we get desperate to save the core principles that lead to prosperity and development.

This is what the Principles textbooks teach us. These ideas made their way into Principles textbooks by some process of natural selection--they were the ideas that stood the test of time in economics, because they were associated with the steady climb toward prosperity of the rich countries and, in the last half century, of the global economy.

There are variations around these core ideas of course, but the variations are always grounded in a home of sensible economics 101. In the midst of the scariest crises of our lifetimes, economists are coming home”.

Every individual life is a message to someone –Gandhi, Hayek and Osho!

There is a wider belief among the first generation of independent India that the Mohandas Karamchand Gandhi “life was his message” it may true for his some of simple ideas, like “simple living, high thinking”, fighting for freedom by non violence, disobedience, etc. 

What was happened or still happening is that some his ideas become dangerous to present society including the “self sufficient”, the “disobedience”, the “self rule”, etc. 

It may be worth to ask our self that is there any country in the world which is “self sufficient” of all goods and services? Clearly the answer is no. And what people misunderstood is not only the Mohandas Karamchand Gandhi ideas but the whole process of freedom fighting. 

People now wolf cry that the present generation have terribly “misunderstood” and the “great injustice has been done to Gandhi, by Gandhians, who deified him and made him into some kind of a cult figure; by his opponents who simply dismissed him as obscurantist, outdated and irrelevant; and by those who have used him as a stamp to justify and legitimised their own agenda. Gandhi needs to be rescued from all three. That would do justice to him”. 

What is more terrible is the saying of “he never tried to impose it on the Congress organisation. In fact the famous Congress resolution passed at Karachi in 1931, advocating centralised planning and large-scale industrialisation, was predictably drafted by Jawaharlal Nehru. But it was Gandhi who moved that resolution, primarily in order to create consensus around it. Gandhi never insisted on his economic ideas to be at the centre of Congress programme”. 

What is the meaning of stressing to “create consensus” when his life is message to the people of this country or the world where he think that the “centralised planning” will kill the people instead of saving from it. 

Let’s not forget that the true Mohandas Karamchand Gandhi ideas will be perished by time alone, including the everyone else’s who think that they wanted to replace his ideas. 

Who does not understand whose language? It is the another barely a year old (or close) newspaper Mint which says “Much before the first five-year Plan was launched, economist Freidrich Hayek had highlighted the pitfalls of centralized planning. More than Hayek, it was Gandhi’s influence that curbed the worst excesses of that process. Nehru did not make mistakes of the kind that caused Soviet-type political disasters. He did not shake the foundations of private property in India that might have led to serious political problems”. 

It is important to say at least two points. First it has been now understood that “it was Gandhi who moved that resolution” of “centralised planning” and the Mint no, no “more than Hayek, it was Gandhi’s influence that curbed the worst excesses of that process”. It does not give when and where he “curbed” it that process? 

Another naturalist Osho says “I wrote Gandhi another letter: "On the one hand you say you are non-violent, and on the other hand you worship the Gita, which teaches simply violence and nothing else." The whole book is a teaching for violence. Krishna, to his disciple Arjuna, is teaching, "You go to the war, fight, because that's what is the will of God, because without his will nothing happens. So if this big war is happening, it cannot happen without his will." Krishna tries in every way to persuade Arjuna. Arjuna argues but he is not a great logician, otherwise it was so simple.” 

No doubt it is now questionable as I posted here yesterday. 

And there is no doubt that we all like or don’t like we respect the man who fought for us but if his ideas become impracticable or more harmful let’s reject it honestly. 

Don't forget to read full article by Osho here