When Michelle talks Climate Change

Wisconsin

Whatever the result of the Wisconsin Recall results, i think there is still hope for progressives. I only hope that this is just a beginning of a broader movement that brings the progressive wing of the Democratic party to congress replacing the Blue Dogs, not to mention the ultra crazy, obstructionist wing of the Republican Party.

Lokpal - Observations

Today the government tabled it's version of the Lokpal bill and Team Anna was burning the same outside. I have only a few observations to make from what i have seen till now.

Team Anna is trying to sell it's version as a solution to everything corrupt under the sun (atleast within India), which is just not going to work. In their zeal to root out corruption they have tried to bring every damn department within the purview of Lokpal. I don't see how they will implement this even they get a chance to pass their version. Also, you just cannot legislate corruption away. It needs to be organic. Instead of the my way or highway approach which has given the Congress Govt to point out Team Anna's intransigence as an excuse to come out with it's own more or less a watered down version of Lokpal, Team Anna must have worked as the watchdog within the joint committee holding the govt to task and coming out with one stronger version of Lokpal.

While Team Anna might have it's heart at the right place, it's method of tantrum throwing and calling into question the integrity of everything that relates to our Polity and constitutional process doesn't go well with people who still have faith within the democratic process. If i should not trust the politicians who are atleast held accountable every 5 years, how am i supposed to trust arbitrarily chosen "Few Good Men" who make up the lokpal. I surely don't (maybe i am too cynical). Let us think about this for a minute. Would anyone have thought the democratic setup we came up with after independence would devolve into such a corrupt system? The idealists and statesmen gave way to corrupt politicians. So, how am i supposed to believe that we need to have an ombudsman who is all powerful and unaccountable and not elected will stick to it's legislated mandate? Maybe in the first 5-10 years. How about after that?

I feel, notwithstanding another fasting threat (on Aug 16), Team Anna has lost a great opportunity to have played a very constructive role in this whole process. The popular anger and support was behind them and they could have kept the Govt's feet to fire. By walking out and coming with their own version and trying to put a deadline by which the Govt must pass their version and threatening with a fast if the govt fails to do so they have painted themselves into a corner.

I also have to say something about the way Team Anna comes off on TV, especially Arvind Kejiriwal and Kiran Bedi. Both of them have their heart in the right place, God bless them, but they come off very off handed in any interview or discussion. When some relevant questions are asked of them they keep changing the goal posts or make simplistic arguments which never answer the asked question. I also hate it when Arvind brings up the movie Gandhi and the scene where Gandhiji burns the passes to their act of burning the Lokpal draft. I am sorry, whatever the drawbacks of our current political system and however corrupt the system is, it is not the same as a subjugating alien power and Team Anna ain't made of Mahatma Gandhis (including highly respected Anna Hazare). I only wish he stops using that as an analogy.

I only hope that they use the immense popular outrage that is behind them in the coming days to good use rather than overreaching and in the end wasting away the whole thing.

Lokpal

             The disgust and anger what everyone of us felt towards our corrupt politicians and bureaucrats manifested itself into unconditional support for Anna Hazare’s fast. The overwhelming support even forced the government into forming a joint committee to draft the Lokpal bill. The story until this point has all the bearings of a triumph for people power.  Subsequent events towards drafting the bill has become acrimonious and a lot of noise has been made by both sides. I have been following this closely for obvious reasons.

while I was a staunch supporter of Anna Hazare’s movement early on, the subsequent policy discussions have made me sit up and think. Some of the points that have made me quite nervous are -

1) Should Lokpal be that all powerful body that is not accountable to anyone, of course, except the supreme court, whilst having Judiciary under its radar?

2) How and from where would Lokpal get all its personnel who are far from all the systemic corruption that plagues our country?

      a) Are they going to recruit people completely new?

      b) Are they going to recruit through the Civil Services and IPS? if so, how is it any different from the current set?

      c) Are their payscales going to be high enough that these new recruits wouldn’t be tempted to misuse their new (seemingly) unaccountable power?

      d) How would Lokpal ensure that normal government office employees aren’t harassed by Lokpal officers? (I am sure there won’t any sympathizers right now on this count, but what has happened in India is either misuse of power or negligence of duty. We have to make sure that Lokpal isn’t another avenue for the same mistakes)

      e) What additional laws/regulations are going to be passed so that the avenues for existing corruption is closed  (or atleast reduced)?

3) Must the office of PM be under the Lokpal? Should 7 unelected, arbitrarily selected (remember only the consent of 7 of 11 members are needed) members be capable of filing a case against the PM while he is in office? (Note – I am completely against this for various reasons.)

4) How are the 11 member committee going to be selected? If it is some arbitrary qualification like impeccable public record, what does that mean?

There are many more questions that keep popping in my mind while I wait anxiously trying to get as much info and see how the details are being ironed out. But what I see is not truly encouraging. Anna’s team, while having brought up many good points seem to be hung up on a few points where I think they are being naïve.

And the middle class which watches the english news channels and has a romanticized view of the world (while not taking any responsibility) expects an avatar (read Anna Hazare. it was funny the same crowd fell for someone like Baba Ramdev) to come and save them their own elected overlords. And as always, we want to have it both ways – We want to shout to anyone who would listen how great our democracy is while hating our politics and politicians. We like to badmouth our babus but don’t think how different would a new bureaucracy be with all its new power.  We want all the powerful to be accountable and are ready to create an unaccountable coterie to do that.

I am keeping my eyes and ears open to hear all this issues discussed and debated in detail before Lokpal bill is passed. But one thing is for sure. There is no hope for our country until critical thinking is part of our curriculum.

Breathing Life into this blog again

I am bringing back this blog to life again. I would be posting atleast twice a week going forward in addition to the links that i would share.

As a first step, here is one of my favorite bloggers speaking -

Watch live streaming video from nytimes at livestream.com

Update: I will also be writing on the TN Elections @ Scaling New Heights.

Timmy's in Town

Wish someone who knew anything about economics and finance interviewed him. Prannoy talks about just fluff and there is nothing of depth. Atleast someone like Swetha Rajpal Kohli would have been better given the guest.

War of Words: Yuan vs USD.

The financial world in the last three to four weeks has been a roller coaster ride. The PIIGS trouble dominated the news initially which gave way to much of the focus on Greece. It was almost a nail-biting thriller on what the fate of Greece would be. Would it be bailed out by Germany (and hence Eurozone) or would be punished for its profligate ways. For now, it seems Greece has been able to get out of this mess, but not without considerable pain by the way of benefit cuts, wage cuts and rise in taxes. It remains to be seen whether these so called austerity measures would be enough to bring it out of this fiscal debacle. However, late last week and through this weekend, most of the focus has been on China and its currency manipulation.

First up, Obama railed against China's currency manipulation which China immediately rebuffed. From Bloomberg

“I don’t think the renminbi is undervalued,” Wen said yesterday at a press conference in Beijing marking the end of China’s annual parliamentary meetings, using another term for the yuan. “We oppose countries pointing fingers at each other and even forcing a country to appreciate its currency.”

Then NYTIMES had this article on how China is taking advantage of the rules to keep its currency pegged to the dollar, artificially keeping it low. From NYTIMES:

Seeking to maintain its export dominance, China is engaged in a two-pronged effort: fighting protectionism among its trade partners and holding down the value of its currency.
[...]
China buys dollars and other foreign currencies — worth several hundred billion dollars a year — by selling more of its own currency, which then depresses its value. That intervention helped Chinese exports to surge 46 percent in February compared with a year earlier.

Paul Krugman in his column on monday calls the US to start taking action on China on this issue. He also says that China, with its policies is causing the overall global growth rate slowdown by as much as 1.5%. This issue, if it becomes an all out trade war between the US and China, would have huge ramifications across the globe. How would this affect India, Rupee's exchange rate, our industries and hence our economy.

If China starts dumping dollars (i don't think they would do this, since its like taking all your money and dropping them in the river), then USD would immediately start losing it value. This would mean even our foreign exchange reserves would start losing their value. (Remember this is the most unlikely scenario). The moment USD starts losing its value our IT industry starts losing its edge, which means that a lot of outsourced jobs would go back to the US (if these jobs are still needed, since even the US would be hurt in the short term with such devaluation of dollars). The same could be said about the manufacturing industry. When USD is cheap, it becomes cheaper to manufacture in US itself. So, China is extremely unlikely to do this.

China cannot go on doing what it is doing now which is to keep buying USD to keep Yuan from appreciating. Given the recession and the unpopularity of Obama's administration for the way it handled Wall Street bailouts and Healthcare Reform, this issue would be a godsend to them. Pointing a finger at a foreign country for all the troubles at home is the easiest thing for any politician to do to get the population rally behind him. Since China is infact manipulating its currency and hence is partly responsible for job loss in the US, it becomes all the more easier. This would make it easier for the US to impose new tariffs and make imports from China costlier, thereby undermining Chinese edge. Furthermore, it would only aggravate the relationship between the two countries. So, China is unlikely to continue to do what it is doing now.

The most likely thing would be to have a war of words, both Obama and the communists playing to their domestic audience, and then China would let a controlled appreciation of Yuan by a small percentage. The current view is that Yuan is undervalued by around 20%. So, i think China is giving such a belligerent response only as a bargaining tactic. It would let Yuan appreciate by a few Percentage points so as to placate world opinion, whilst keeping its manufacturing advantage to itself.

But it would interesting to see how these two countries play out this issue in the next fews.

We sure are living in interesting times.

Must Read from Econoblogs

The entire post is a must read.

From - Nakedcapitalism -

The widespread, vocal opposition to the TARP was evidence that a once complacent populace had been roused. Reform, if proposed with energy and confidence, wasn’t a risk; not only was it badly needed, it was just what voters wanted.

But incoming president Obama failed to act. Whether he failed to see the opportunity, didn’t understand it, or was simply not interested is moot. Rather than bring vested banking interests to heel, the Obama administration instead chose to reconstitute, as much as possible, the very same industry whose reckless pursuit of profit had thrown the world economy off the cliff. There would be no Nixon goes to China moment from the architects of the policies that created the crisis, namely Treasury Secretary Timothy Geithner, Federal Reserve Chairman Ben Bernanke, and Director of the National Economic Council Larry Summers.