I acknowledge that corruption is an endemic crisis that plagues the institutions of India. That strong political activism and leadership are essential to rid this vicious problem. I also acknowledge that given the poor caliber of many politicians in India, strong consistent public pressure might be one of the most effective ways to instrument change rather than the futile efforts of electing better leaders. If you agreed with the previous statement then you don’t seem to hold much faith in a democracy, do you?
I see two hazards in the Hazare campaign. One is the bill itself. While certain provisions such as the inclusion of the Prime Minister and extended sentences are healthy, others I find are not. Chief amongst them is the Lokpals police powers and ability to register FIR’s. I can understand the need to give the Lokpal power to initiate proceedings in trial but to give it police power is to give it exemplary authority over individual freedom. Detainment and questioning are police powers that infringe on individual liberty. Also, it would be wise to remember that the Lokpal as the activists want it would be an organization that permeates deep into society. It would work at the grass roots. To involve the CBI directly with such an organization threatens to bring close government scrutiny into our personal lives. That might be ideal to stop corruption, but also opens a Pandoras box of problems.
The second pair of hazards that I worry about is the very manner in which the Lokpal might be brought to existence. In the early 1900’s we instituted protests similar to this against the British to demand independence. India is now a free sovereign democracy. To demand independence just as Mr. Hazare did or to threaten the government to either accept the bill or leave is unacceptable and a stain on our democracy. We elected this government to work with us the people, not to let individuals issue ultimatums to it. It would be also important to mention that a reason why the Indian protest has been largely non-disruptive, unlike the Arab spring is because of the democratic environment that exists. It allows a vent to social tensions. To undermine that democracy would be to threaten the existence of the Indian union. This is not a game to play who’ll blink first with. It would be wiser on the governments’ part to institute a referendum if one is possible. It would be wiser on Mr. Hazares’ part to stop making threats on my government and instead work with the parliament to get his version of the bill also introduced for a fair debate. Force to unilaterally accept the bill will ensure the failure of democracies safety mechanisms: deliberation with multiple views and addressing the threats I have mentioned in the prior paragraph.
It is amazing to see the vitality of activism in India. It is disheartening to see how many treat the constitution. The constitution was created by us the people and empowers our government to make laws, not individuals or civil society groups. They can maintain pressure but not so as much to undermine the functioning of democracy and working of the constitution. I realize the constraints in India, notably the lack of character in many politicians. I hope the civil society walks a tempered path realizing that their actions will have an impact on a whole generation who are beginning to treat the government as not their own. Crucially, play by the rules! The government is not a slave, it’s a servant. If you want to change it: Join it. Bring better blood in and destroy the hierarchy and political cloud that exists. In our efforts to get the best of both worlds (not being a political leader but demanding better politics), I hope we do not fall folly to the age old plagues of India. Seeking shortcuts, greed and hunger for power. It cost us in colonialism let it not cost us our democracy.
Sunday, August 21, 2011
Sunday, July 31, 2011
What America taught me.
Always be polite.
Learn to cook.
Assemble your own bike.
Love the outdoors.
Jaywalking won’t kill you.
Dreams are realities that need effort to materialize. So dream big but work your ass off.
People are and can be fiercely independent lacking some elements of social conformity. Respecting this individuality is crucial.
The best competition is with self
Never try burrito noches after 8 pm.
To be critical of self, occasionally. Success can’t get to your head.
Partying (any fun) is essential. Otherwise you will be a very boring and socially stunted person.
Biking is amazing, especially when you have trails like the Olentangy River trail. Best thing is traffic isn’t trying to kill you, unlike most of London.
Be the best you can be. Love this challenge unconditionally and without disdain or hurting fellowship.
Play fair.
If you are drunk (hung-over), on west campus and thirsty without anything more than a bike: head for the campus police department at Blankenship Hall. They have amazing water fountains, are open all night and officers on duty give you free hangover pills. Apparently they don’t take action against you because of the threat of Jeopardy. Plus they’re nice.
Condoms are disproportionately expensive.
Go slow on life but go strong.
Talk like you mean it and talk well.
You can sell/buy anything.
Do everything (within limits) you can do and want to. Unlike elsewhere fighting for your own is not the best way forward. Presenting and proving yourself is.
Trial by fire is the best way to learn. God knows it hurts to get burnt. But you learn faster and better than you would any other way.
Take time off for yourself. You will have issues and questions if your plans here go farther than college. Groping your way out is the only way forward but thinking makes the groping easier.
Keep learning, always.
Dancing the way americans do (imposed censorship) is not that bad. Lacking in taste but fun.
Rock climbing rocks!
*From personal experience or corollary learning and still learning...
Learn to cook.
Assemble your own bike.
Love the outdoors.
Jaywalking won’t kill you.
Dreams are realities that need effort to materialize. So dream big but work your ass off.
People are and can be fiercely independent lacking some elements of social conformity. Respecting this individuality is crucial.
The best competition is with self
Never try burrito noches after 8 pm.
To be critical of self, occasionally. Success can’t get to your head.
Partying (any fun) is essential. Otherwise you will be a very boring and socially stunted person.
Biking is amazing, especially when you have trails like the Olentangy River trail. Best thing is traffic isn’t trying to kill you, unlike most of London.
Be the best you can be. Love this challenge unconditionally and without disdain or hurting fellowship.
Play fair.
If you are drunk (hung-over), on west campus and thirsty without anything more than a bike: head for the campus police department at Blankenship Hall. They have amazing water fountains, are open all night and officers on duty give you free hangover pills. Apparently they don’t take action against you because of the threat of Jeopardy. Plus they’re nice.
Condoms are disproportionately expensive.
Go slow on life but go strong.
Talk like you mean it and talk well.
You can sell/buy anything.
Do everything (within limits) you can do and want to. Unlike elsewhere fighting for your own is not the best way forward. Presenting and proving yourself is.
Trial by fire is the best way to learn. God knows it hurts to get burnt. But you learn faster and better than you would any other way.
Take time off for yourself. You will have issues and questions if your plans here go farther than college. Groping your way out is the only way forward but thinking makes the groping easier.
Keep learning, always.
Dancing the way americans do (imposed censorship) is not that bad. Lacking in taste but fun.
Rock climbing rocks!
*From personal experience or corollary learning and still learning...
Thursday, July 28, 2011
Is the United States a divided house or wanting in presidency?
Some are born great (like Harry Potter). Others have greatness thrust upon them. It seems that President Obama is falling into the latter category. He probably knew something of this sort was coming when he ran for the Presidency. He might not have accounted for how much he would need to rise to meet the challenge. The title of the blog suggests a question which I am in no position to answer. So I’d rather illustrate why the question seems important.
I’ve seen politics in the UK and India but nowhere has it been as polarized as in the US; at least when it comes to serious things. That the tea party, with vocal supporters of default can actually exert considerable influence in the decision making is alarming. While its most likely that default will be averted in the eleventh hour, the very fact that it took that much of give and take to reach a consensus pushes me to ask the question I did. Democracies are strong because they involve people. Any policy made is the result of a consensus and hybridizes ideas of different parties. Yet when faced with obstinate parties and unwavering ideologies: the core of any consensus, “compromise” is lost. That is a divided house. It’s a place where people start caring more about their beliefs and ideologies. Not about the house and the nation.
On the other hand there is the President. He is the elected representative, indirectly chosen by the people to lead them. To prevent concentration of power he is subject to the legislators on Capitol Hill. At times, he has the luxury of exemplary support in both houses. Else he executes the policies of the Federal government by engaging with the hill. His personality, charisma and power are crucial to the enabling of consensus. Several American presidents’ present precedents on this matter, including Dwight Eisenhower (often poor relations with Congress) and Ronald Reagan (exhausted the Soviets). In this case however, President Obama clearly is not able to break deadlock. He might be able to cajole his own party to accept cuts in social policies. He cannot get the G.O.P house speaker, John Boehner to accept closure of tax loopholes, let alone rises. Boehner in turn is under pressure from the conservative right to concede not an inch of ground. The democrats too refuse to concede deep cuts in a bloated and inefficient social service. Clearly if every party is to have their way a default is inevitable. A default will be terrible. It will spark partial government shutdown, quickly depreciate the dollar, increase cost of borrowing, and bump up actual cost of living. It will jeopardize the American and Global economy. Eventually as the American people get affected Congress will undoubtedly act. It would then be too little too late.
What the president must remember is that while Congress will be to blame, it is a body of 535 people. Eventually, they are responsible to their constituent which consists of a couple of million; at most. The president on the other hand is an individual directly responsible to the nation; vested with enormous authority to act in its interest. Congress might be paralyzed by the powerful weakness of democracies: indecision. That is why the executive exists. It is time for the president to do something truly presidential, if he can.
I’ve seen politics in the UK and India but nowhere has it been as polarized as in the US; at least when it comes to serious things. That the tea party, with vocal supporters of default can actually exert considerable influence in the decision making is alarming. While its most likely that default will be averted in the eleventh hour, the very fact that it took that much of give and take to reach a consensus pushes me to ask the question I did. Democracies are strong because they involve people. Any policy made is the result of a consensus and hybridizes ideas of different parties. Yet when faced with obstinate parties and unwavering ideologies: the core of any consensus, “compromise” is lost. That is a divided house. It’s a place where people start caring more about their beliefs and ideologies. Not about the house and the nation.
On the other hand there is the President. He is the elected representative, indirectly chosen by the people to lead them. To prevent concentration of power he is subject to the legislators on Capitol Hill. At times, he has the luxury of exemplary support in both houses. Else he executes the policies of the Federal government by engaging with the hill. His personality, charisma and power are crucial to the enabling of consensus. Several American presidents’ present precedents on this matter, including Dwight Eisenhower (often poor relations with Congress) and Ronald Reagan (exhausted the Soviets). In this case however, President Obama clearly is not able to break deadlock. He might be able to cajole his own party to accept cuts in social policies. He cannot get the G.O.P house speaker, John Boehner to accept closure of tax loopholes, let alone rises. Boehner in turn is under pressure from the conservative right to concede not an inch of ground. The democrats too refuse to concede deep cuts in a bloated and inefficient social service. Clearly if every party is to have their way a default is inevitable. A default will be terrible. It will spark partial government shutdown, quickly depreciate the dollar, increase cost of borrowing, and bump up actual cost of living. It will jeopardize the American and Global economy. Eventually as the American people get affected Congress will undoubtedly act. It would then be too little too late.
What the president must remember is that while Congress will be to blame, it is a body of 535 people. Eventually, they are responsible to their constituent which consists of a couple of million; at most. The president on the other hand is an individual directly responsible to the nation; vested with enormous authority to act in its interest. Congress might be paralyzed by the powerful weakness of democracies: indecision. That is why the executive exists. It is time for the president to do something truly presidential, if he can.
Saturday, July 23, 2011
Buckeye, the international way + its Summer!!
So what does it feel like to come to Buckeye-land as a complete stranger? The reader really doesn’t have to care about any of this. This article is shaped by my opinions and experiences. Yet if you are curious a little, maybe; read on.
The first thing that strikes most international students is: Freedom! Just like any other freshman, this is one of the first real tastes of freedom. Yet for us it’s far more; we are freed from more than just sweet but omnipresent parents. We have a fresh start in a new world where we can be who we want to be. It’s a time for adventure and exploration and much like dogs in a new home we set about sniffing our way around (sometimes literally!). We try to make new friends with all the people we meet and grapple with the challenge of overcoming, sometimes significant cultural barriers. For now (the first few months) most internationals have this much in common. Yet we are people too and we each have different reasons and expectations to be here. So as the going gets tough and the novelty wears out, we crave to go back at least in a sense to the life we knew. I mean, it can get pretty crazy if you hear soccer and have to picture football and while wanting to say football, make a conscientious effort to say soccer. More importantly people miss their own languages, cultures, slangs and social conditioning. We do the obvious, we group up. It does save a lot of the pain; think about it. You can go around being a normal OSU student, talking with classmates and stuff. When you need to unwind, you can do it the way you want to and have always done at home.
Some come here to get a good education, grades and a job back home. Then well, the socializing time isn’t really a needed thing anyways. It’s so much easier to make a nice homely bubble, filled with food, friends and a life reminiscent of home. The rest of the time is better spent in the labs or the library while you race yourself to success. Yet, this is the story of the majority. What happens to those who do try to come out, and why do they try if there is an easy way out? I’ve got to add here, that I make it a point to not over express the dynamics (emotional or psychological) even to my closest friends. Yet once in a while, when I get the time to think about it, and home I do wonder. What the hell am I doing here (Columbus, OH) instead of a sweet summer back home? Sure the place is great and the weather was great, but home’s home, right?
I think the biggest reason (for being where I am) comes not from reasoning or need but from a character trait. As there are people who refuse to consider living outside Ohio
For those who make the bubble of home or go back every year, they get a reprieve. It’s not just the people but also the physical home and its surroundings that help. Like, during summer most of us are bored. Friends visit and we do hang out but it’s not like college. Yet the when you’re home a vast amount of your time is distracted in doing family stuff. From talking with the people, to going around the house to playing video games; normal stuff which we take for granted. The sheer familiarity of the whole setting gives a relief and keeps us occupied just like a Harry Potter or paperback novels. So an international student could actually have a far more interesting and in fact exciting summer than most but it’s going to feel pretty empty and hollow sometimes (like reading Macbeth for the first time).
So why am I here? Well, I want to be. It’s hard sometimes but it’s also fun. You push your ingenuity to discover more things to do to make your life richer by the day. You bike, climb, write posts, do research or just sit on the oval with Pandora on. Pulling an occasional all-nighter, counts; you’ll be judged. I trust if I can embrace the challenge then the strength of character and mind gained will be worth it. On the flip side, it will put a question mark on what’s home for the next few years. I’m afraid it’s going to make me less caring person.
Nearly done!
When I came to America
Go Bucks! (42 days left)
Monday, July 18, 2011
Dont stop at the Debt limit
Defenitions:
Rich-top 20%
Middle-40-60%
Poor- bottom 20%
This post closely follows my last post, both in chronology and essence. Right now D.C is fighting a sharply divisive battle to extend the Federal debt limit. Failure to do so will mean partial U.S default, a drop in confidence in the US dollar and bonds. Bad news for America! The crux of the issue is the means to decrease government deficit to prevent further escalation of the debt limit. De-escalation of the wars and reduced spending on the US military is a partial given. I mean you could squabble on whether to keep one extra aircraft carrier or not but that’s just about it. The military spending of the United States as a percent of GDP is the same as that of a China. So ideally unless China is secretly going bankrupt, this spending seen disjointed from the whole problem should not be of major concern.
Social services are a different ball game. The entire healthcare system accounts for 38%-45% of the entire government spending and 16% of GDP. Private audits as well as most senators would agree that the system lacks in efficiency. During the general economic growth of the US, it would seem money was merely pumped into the system without any concerted effort to increase efficiency. So your doctor gets paid so much more than doctors elsewhere. On the flip side despite being the wealthiest country in the world, the United States suffers from one of the most inequitable distribution of wealth. The GINI coefficient which is a measure of income inequality paints a sad picture. Inequality in the states is worse than most of Asia, Africa and far worse than most of Europe. So when you cap the tax for the richer sections of the society you get far less revenue from taxation than you would in a country with a better wealth distribution. The logical argument has been that giving this financial freedom to the wealthy allows them to reinvest in the economy. This ensures prudent investment, better management of wealth and smaller/efficient government. Something’s going wrong though. This is a theory.
A Forbes survey (1) actually does a pretty good job of highlighting how Americans make and spend their money. Crucially you’ll observe that rich Americans do not spend the highest as a percent of their income on most things. Where they do the difference is only marginal. True, even a small percentage will have high value but so will the difference of the saving they have, compared to the poor and middle class. The question is what happens with these savings. Unsurprisingly a lot is in investment but where? In nations like India and China, banks offer a far higher rate of interest and then use the public money to do the investing. This has an advantage of ensuring the money is invested in the domestic market. Banks have an incentive to stimulate local markets to ensure their own growth. America however seems to be suffering from a flight of capital. High net value individuals seem to be investing more and more in better appreciating economies. Often even if the investment is directed to American companies, the investment is eventually pumped overseas. The fact is that as economic polarization continues (and that is irrefutable) a vast amount of the investment being made is offshore restricting US job growth, further polarizing wealth. A vicious cycle.
Another significant investment the rich in America make is in the luxury market. This can cover anything from Gulfstream jets to Mansions. The market value of these products may be high, but the positive economic impact is far less; depth wise. Simply, if the money was split and invested in other development ventures more people would've been helped. The problem maybe, that America is getting too successful. At least a section is. They chose to fund the lives and the activity of the many others. Doing so they have created a complacent workforce on a global back foot. Now as the rich choose to shrug of this responsibility and the political guns go off like loose cannons, careful planning is again ignored. Question I want to ask is how do you make sure Americans invest in their country again? How do you improve the competitiveness of existing industry and spawn new ventures to attract new investment. For now, the grand bargain is essential. No single avenue can generate enough saving to create a definite impact on debt. So increase taxes for now and look for investment patterns amongst the rich before relaxing them again. As for Medicare/aid well really you cant do much because of the insurance companies.
Thing is you can solve this problem multiple ways with strong leadership. The best way may be to incentivize the rich to invest locally. Use a part of that to modify healthcare and spawn new industry via research. Play forces of corporate insurance payers against insurance companies. Play inventors and entrepreneurs against overseas investment. Importantly try to hasten the global flattening. Promote a more equitable economy by selective reduction of social services. Divert the savings to tertiary education and saving. Promote STEM, making graduates valuable to industry as well as research. Essentially: force skill into the workforce by denying benefits to the uncompetitive but providing support to ensure upward mobility. I accept the fact that eventually India and China will become as rich as the United States, maybe even per capita wise; someday. What I cannot agree with is that the American economy must fall for them to rise.
(1) http://www.forbes.com/2006/07/19/cx_de_americanspending_11.html?thisSpeed=35000
Rich-top 20%
Middle-40-60%
Poor- bottom 20%
This post closely follows my last post, both in chronology and essence. Right now D.C is fighting a sharply divisive battle to extend the Federal debt limit. Failure to do so will mean partial U.S default, a drop in confidence in the US dollar and bonds. Bad news for America! The crux of the issue is the means to decrease government deficit to prevent further escalation of the debt limit. De-escalation of the wars and reduced spending on the US military is a partial given. I mean you could squabble on whether to keep one extra aircraft carrier or not but that’s just about it. The military spending of the United States as a percent of GDP is the same as that of a China. So ideally unless China is secretly going bankrupt, this spending seen disjointed from the whole problem should not be of major concern.
Social services are a different ball game. The entire healthcare system accounts for 38%-45% of the entire government spending and 16% of GDP. Private audits as well as most senators would agree that the system lacks in efficiency. During the general economic growth of the US, it would seem money was merely pumped into the system without any concerted effort to increase efficiency. So your doctor gets paid so much more than doctors elsewhere. On the flip side despite being the wealthiest country in the world, the United States suffers from one of the most inequitable distribution of wealth. The GINI coefficient which is a measure of income inequality paints a sad picture. Inequality in the states is worse than most of Asia, Africa and far worse than most of Europe. So when you cap the tax for the richer sections of the society you get far less revenue from taxation than you would in a country with a better wealth distribution. The logical argument has been that giving this financial freedom to the wealthy allows them to reinvest in the economy. This ensures prudent investment, better management of wealth and smaller/efficient government. Something’s going wrong though. This is a theory.
A Forbes survey (1) actually does a pretty good job of highlighting how Americans make and spend their money. Crucially you’ll observe that rich Americans do not spend the highest as a percent of their income on most things. Where they do the difference is only marginal. True, even a small percentage will have high value but so will the difference of the saving they have, compared to the poor and middle class. The question is what happens with these savings. Unsurprisingly a lot is in investment but where? In nations like India and China, banks offer a far higher rate of interest and then use the public money to do the investing. This has an advantage of ensuring the money is invested in the domestic market. Banks have an incentive to stimulate local markets to ensure their own growth. America however seems to be suffering from a flight of capital. High net value individuals seem to be investing more and more in better appreciating economies. Often even if the investment is directed to American companies, the investment is eventually pumped overseas. The fact is that as economic polarization continues (and that is irrefutable) a vast amount of the investment being made is offshore restricting US job growth, further polarizing wealth. A vicious cycle.
Another significant investment the rich in America make is in the luxury market. This can cover anything from Gulfstream jets to Mansions. The market value of these products may be high, but the positive economic impact is far less; depth wise. Simply, if the money was split and invested in other development ventures more people would've been helped. The problem maybe, that America is getting too successful. At least a section is. They chose to fund the lives and the activity of the many others. Doing so they have created a complacent workforce on a global back foot. Now as the rich choose to shrug of this responsibility and the political guns go off like loose cannons, careful planning is again ignored. Question I want to ask is how do you make sure Americans invest in their country again? How do you improve the competitiveness of existing industry and spawn new ventures to attract new investment. For now, the grand bargain is essential. No single avenue can generate enough saving to create a definite impact on debt. So increase taxes for now and look for investment patterns amongst the rich before relaxing them again. As for Medicare/aid well really you cant do much because of the insurance companies.
Thing is you can solve this problem multiple ways with strong leadership. The best way may be to incentivize the rich to invest locally. Use a part of that to modify healthcare and spawn new industry via research. Play forces of corporate insurance payers against insurance companies. Play inventors and entrepreneurs against overseas investment. Importantly try to hasten the global flattening. Promote a more equitable economy by selective reduction of social services. Divert the savings to tertiary education and saving. Promote STEM, making graduates valuable to industry as well as research. Essentially: force skill into the workforce by denying benefits to the uncompetitive but providing support to ensure upward mobility. I accept the fact that eventually India and China will become as rich as the United States, maybe even per capita wise; someday. What I cannot agree with is that the American economy must fall for them to rise.
(1) http://www.forbes.com/2006/07/19/cx_de_americanspending_11.html?thisSpeed=35000
Bringing America up to speed.
This blog has been long in the writing. Life’s actually getting very busy and challenging for me, in the serene city of Columbus, OH. The story starts though in a far more tropical and bustling metropolis of Bangalore, India. It was summer and keeping with Indian summers I was perspiring like crazy as I walked around with Nandan Nilekani, co-founder of Infosys in their Bangalore corporate campus. To the uninformed, Infosys along with corporations like TCS and Wipro accept 3.32 million jobs(1) outsourced and off-shored from the United States alone. Mr. Nilekani described Infosys as a catalyst of efficiency streamlining business processes and generating huge profits for American businesses and shareholders. He also said, given the relative lower labor costs and high technical proficiency in India and some other places, outsourcing is here to stay. I’ll take his word on that. For one thing, outsourcing strengthens globalization and enhances equitable distribution of wealth. Both of these are progressive traits that have only got stronger over vast swathes of commercial history. To counter these forces would be regressive and defeatist considering a comprehensive global economy is fast becoming a reality and maybe even a necessity. Now why are most countries benefiting while a few losing out a lot? Why do the streets of Greece resemble a third world nation while the world’s only superpower talks about default? (If you already know a lot about the recent depression just skip to the fourth paragraph)
Post World War 2, America experienced an economic boom fueled by demand, industrial growth and innovation. A lot of these were a fall out of post war reconstruction and emergence of new markets in former colonies. Despite intermittent recessions, American economy flourished and innovators across fields created new products and services; IT was one of them. Outsourcing and off shoring became business practices and American corporations found a new competitive edge and profit generator: low cost! As both India and America enjoyed the mutual benefits of the IT miracle people were missing the obvious. It’s a simple question that comes from an equally simple observation. India and America are so differently placed economically. Americans enjoy a far higher standard of life than what most Indians could hope for. Why?
Maybe it’s the fact that America is rich in oil, gold and all those precious stuff under the ground. Think again; the last time mining was economically significant well.. was a long time ago. Manufacturing has remained stable value wise but jobs just haven’t grown a lot (I’ll blame China and better productivity technology for that). So maybe Americans were going to college studying hard and coming out with specialized technical degrees? And if that were not true then America really has no reason to remain where it is and will lose wealth to others. It’s as simple as that: you have money as long as you have something I want to buy. Now say if you really don’t have the cash but still want to live the American dream of a nice house and car and stuff. Well if you’re the only one that’s cool with the USA. But say there are millions like you and people who’ll bend the rules to get you what you want but can’t afford. The rest is the story of the 2008 Economic Depression. The scary part of this depression was that it redefined outsourcing and off-shoring. As companies started losing money they cut back on jobs like they always do. They also moved jobs to cheaper places. Companies actually used their own offices and employees in India and Philippines to do the same stuff well educated Americans would do but for more than triple the cost.
A college degree was no longer a safeguard against outsourcing. To illustrate, imagine someone had upped the ante on what constituted ‘outsourcable’. The result is a pool of qualified young people as well as non-collegiate workforce without jobs in the time of a recession. While the American economy will be able to accommodate many of the qualified ones the problem is far deeper. In the next five years, if more people go to college and get technical degrees and outsourcing continues (which it will) then the existing industries would still be unable to hire a large number of these people. The reason comes back to my argument (para 3). If America does not do things differently from the rest of the world it will continue to lose wealth. Guess how many Indians, Asians, Latin Americans, East Europeans and Africans are going to college to get the technical degrees you’re trying to get? True a lot of their colleges aren’t nearly as good as yours but as the average job description of specialists goes for now: their colleges are good enough. So unless you are something different (smart researcher or inventor often called niche employee) you’re in for a race just like the kids in Asia. If you don’t care and look forward to the social security check you’re fine as long as you’re the only one with that brainwave. But you won’t be.
All’s lost? Well not really because economics has a nice law that comes as an analogue to Murphy’s Law. It goes like this: If you really work hard for something opportunity will present itself. Essentially as a corollary to my argument if Americans do something differently that can make a difference. So say a new industry is created in the United States much like IT and computers were, it will need human resource. This is the question that is of so much focus in certain circles of this country. Will there be a new Bill Gates or Steve Jobs who can create a new industry. More importantly will it happen in America because even as I type I know of at least five other countries in a race technologically to research and create those industries? The winner gets the patents and the chance to build the industry with their own people tandem to American economic interests.
Fortunately America remains the largest spender on research for now. If biomedical is to be the next thing then the National Institute of Health (NIH), the NSF and other agencies are doing their bit. American universities still manage to attract bright brains and sometimes keep them. The strategy must be to keep as much of this human talent and increase public and even private spending in these research which can stimulate new industry. Investment banks which have now slowly returned to profit must take startups seriously. Till (If) these solutions make a concrete impact on the economic scene this country needs to do as much as retooling of its people as possible. National debt needs to be addressed and social programs adjusted. Taxes as well must be put under the scanner as there is no one right way to address the deficit. In this mixed approach there will be bruised parties but that can be easily addressed with strong leadership. So strong leadership then.
Note: Statistics is limited however most sources are from the Federal Labor and Statistics bureau
Post World War 2, America experienced an economic boom fueled by demand, industrial growth and innovation. A lot of these were a fall out of post war reconstruction and emergence of new markets in former colonies. Despite intermittent recessions, American economy flourished and innovators across fields created new products and services; IT was one of them. Outsourcing and off shoring became business practices and American corporations found a new competitive edge and profit generator: low cost! As both India and America enjoyed the mutual benefits of the IT miracle people were missing the obvious. It’s a simple question that comes from an equally simple observation. India and America are so differently placed economically. Americans enjoy a far higher standard of life than what most Indians could hope for. Why?
Maybe it’s the fact that America is rich in oil, gold and all those precious stuff under the ground. Think again; the last time mining was economically significant well.. was a long time ago. Manufacturing has remained stable value wise but jobs just haven’t grown a lot (I’ll blame China and better productivity technology for that). So maybe Americans were going to college studying hard and coming out with specialized technical degrees? And if that were not true then America really has no reason to remain where it is and will lose wealth to others. It’s as simple as that: you have money as long as you have something I want to buy. Now say if you really don’t have the cash but still want to live the American dream of a nice house and car and stuff. Well if you’re the only one that’s cool with the USA. But say there are millions like you and people who’ll bend the rules to get you what you want but can’t afford. The rest is the story of the 2008 Economic Depression. The scary part of this depression was that it redefined outsourcing and off-shoring. As companies started losing money they cut back on jobs like they always do. They also moved jobs to cheaper places. Companies actually used their own offices and employees in India and Philippines to do the same stuff well educated Americans would do but for more than triple the cost.
A college degree was no longer a safeguard against outsourcing. To illustrate, imagine someone had upped the ante on what constituted ‘outsourcable’. The result is a pool of qualified young people as well as non-collegiate workforce without jobs in the time of a recession. While the American economy will be able to accommodate many of the qualified ones the problem is far deeper. In the next five years, if more people go to college and get technical degrees and outsourcing continues (which it will) then the existing industries would still be unable to hire a large number of these people. The reason comes back to my argument (para 3). If America does not do things differently from the rest of the world it will continue to lose wealth. Guess how many Indians, Asians, Latin Americans, East Europeans and Africans are going to college to get the technical degrees you’re trying to get? True a lot of their colleges aren’t nearly as good as yours but as the average job description of specialists goes for now: their colleges are good enough. So unless you are something different (smart researcher or inventor often called niche employee) you’re in for a race just like the kids in Asia. If you don’t care and look forward to the social security check you’re fine as long as you’re the only one with that brainwave. But you won’t be.
All’s lost? Well not really because economics has a nice law that comes as an analogue to Murphy’s Law. It goes like this: If you really work hard for something opportunity will present itself. Essentially as a corollary to my argument if Americans do something differently that can make a difference. So say a new industry is created in the United States much like IT and computers were, it will need human resource. This is the question that is of so much focus in certain circles of this country. Will there be a new Bill Gates or Steve Jobs who can create a new industry. More importantly will it happen in America because even as I type I know of at least five other countries in a race technologically to research and create those industries? The winner gets the patents and the chance to build the industry with their own people tandem to American economic interests.
Fortunately America remains the largest spender on research for now. If biomedical is to be the next thing then the National Institute of Health (NIH), the NSF and other agencies are doing their bit. American universities still manage to attract bright brains and sometimes keep them. The strategy must be to keep as much of this human talent and increase public and even private spending in these research which can stimulate new industry. Investment banks which have now slowly returned to profit must take startups seriously. Till (If) these solutions make a concrete impact on the economic scene this country needs to do as much as retooling of its people as possible. National debt needs to be addressed and social programs adjusted. Taxes as well must be put under the scanner as there is no one right way to address the deficit. In this mixed approach there will be bruised parties but that can be easily addressed with strong leadership. So strong leadership then.
Note: Statistics is limited however most sources are from the Federal Labor and Statistics bureau
Thursday, June 16, 2011
India-China-America
The economies of Asia have seen a phenomenal resurgence since the 80s. Now, into the second decade of the new millennia, behemoths of the likes of China and India are challenging the powerful position of the west. In this respect I want to talk about the two of the countries that interest me the most.
India is growing fast, surpassed only by China in terms of growth rate. In fact, India’s story to preeminence has been vastly different from China’s. India liberalized much after the red nation, as late as 1990s (compared to China’s 1970’s). India’s growth has been one driven by private individuals and domestic consumption. China has succeeded due to government involvement and competitive export strength. This has spurred high infrastructure growth and enormous wealth creation. Yet China faces enormous problems too. The wealth created has one of the most unequal distributions amongst nations. Large Chinese corporations which were for so long government controlled have suffered losses and as a result their privatization has been far from equitable. The Chinese entrepreneurial environment is still lackluster at best. Companies pay thrice the wages they used to a decade ago to be “Made in China”. Crucially, China still lacks the ability to offer a networked IT-manufacturing combo; that will be vital to the next generation of logistics and networked pipeline manufacturing. India faces its share of gigantic problems but only a few post serious threats to its potential of growth.
Therefore if we shift focus to the “Indian condition” an intriguing picture comes up. In the urbanized centers of India the evidence of a globalized economy is vibrant. Most street literature is in English, malls abound and commerce conducted is both intensive and quick. Yet rural India is plagued by the most common problems that afflict nations like Somalia and Congo. The challenge therefore is to utilize this untapped potential as a strategic competitor to the Chinese manufacturing industry. India’s growth has been long driven by intrinsic growth, characterized by reliance on domestic market, domestic entrepreneurship and industry. When India first entered the global economy it was using the service of IT. Consequently, the country created an effective educated middle class who generated wealth, consumption and as a result spurred economic growth. Now, the inflated demand for products has put enormous stress on the supply chain over heating the economy. Bubble formation remains a relatively low possibility due to the tight fiscal policies in India. In this juncture spurring the manufacturing sector remains a lucrative option to not only address the supply demand deficit but also employ millions, reduce poverty and create vast numbers of new consumers. The average wage in India is still a third of China’s favoring this strategy. Poor infrastructure and labor laws remain a significant hindrance.
Enter, the United States. As the position of the west changes, the USA will seek better association with Asia for its own benefit and derivatives. The United States already has a deep economic relation with the PRC. The question that now remains to be answered, is can this relation be expanded further to other spheres. Culturally, there remains an extensive interaction through university education and yet has this interaction resulted in more open and trusty relations? The reality is that the United States cannot afford to be placid with China because it and quite correctly sees china as competition. So given a relatively status quo with China, where can America effect a dynamic relation? If it is to be India, why it and what are the implications of the relationship.
Ever since President Clinton feted the first meeting of the largest democracies, Indo-US relations have never looked back. A large part of it is strategic and economic. India’s recent deals with the Boeing Company will keep its C-17 plant operational for a year and feed 5000 American jobs. A lot of it is also cultural. As two democracies with significant diversity, both states find something common to build on. The economic reality is far different. While the United States is the richest, India is by capita one of the poorest. Yet faced with burgeoning economic power: a new dynamic finds India contesting American economic prowess. In this regard an important problem is how America reinvents itself to create employment for both its own people as well as new products to sell to rapidly developing markets. India and China are both coming to the stage where even hi-tech products can be produced by local companies in a local environment. If America is to implement a new technology, will it be able to beat the Indian and Chinese researchers to the race. Will America become a specialized zone for innovation and good creation, thus creating a niche in the global job market for its citizens? Or will America succumb to the pressure and speed of the growing east.
How will this triangle change with time?
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